A Primer to the 2Z Token

Basics

The 2Z token is an SPL token, issued on the Solana blockchain.

At launch, the total minted supply of the 2Z token will be 10 billion. This number will change over time for two reasons. First, new tokens are minted via inflation (see Inflation and Network Security). Second, existing tokens are burned for integrity purposes (see Integrity in the Rewards Model). Asymptotically, cumulative inflation will be bounded by cumulative burning. However, in the short run, cumulative inflation may exceed cumulative burning.

Token Flow

The circulation of 2Z tokens, depicted below visually, can be organized into three flows.

1. Revenue: users pay in 2Z tokens for connectivity services (see Value and Prices for Solana Validators). In some special cases, the DoubleZero system will accept native tokens in the applicable blockchain and convert those into 2Z. This is the flow marked in red.
2. Rewards: network contributors who provide the underlying connectivity services receive the collected revenue 2Z tokens as rewards (see Rewards to Network Contributors). In addition, some of these collected tokens are burned for integrity purposes (see Integrity in the Rewards Model). This is the flow marked in blue.
3. Staking: the DoubleZero system requires some “overhead” tasks, e.g. maintaining records of routes, verifying the performance of links, computing the division of rewards, etc. Controllers perform these tasks using stake that is delegated to them from token holders. The protocol mints 2Z tokens to reward these entities (see Inflation and Network Security). This is the flow marked in green. In addition, network contributors have to stake some 2Z tokens to vouch for the performance of their links (see The Duality of DoubleZero Staking).

Goals and Principles

Under this design, the 2Z token aims for the following goals for DoubleZero:

1. Utility: the 2Z tokens enables payments and value exchange. People who want to use the network pay those who provide services, using primarily the 2Z token. The token thus enables the exchange of services on the platform.
2. Efficiency: 2Z token rewards are used to make the underlying network efficient. Contributors receive tokens based on how much they enhance the network beyond the benchmark of the public internet, using Shapley values (a means of distributing value in cooperative situations fairly).
3. Security: the 2Z token supports the network’s security in three ways: through conventional staking to secure general compute tasks and contributors’ links, through burning to prevent an over-concentration of power or inorganic traffic, and through giving the protocol broader community ownership. This creates the foundations for DoubleZero to decentralize safely.

Chain Architecture

The technical architecture of DoubleZero can be summarized here.

• The DoubleZero network itself serves as the rails that ecosystems, e.g. Solana and other distributed systems, can use for communication.
• The 2Z token itself lives on the Solana blockchain specifically, and it circulates between users, network contributors, and stakers accordingly. In the future, it may expand to other blockchains.
• A DoubleZero ledger, run by the controllers, is used to both manage the underlying network topology and the direction of token flows on Solana. The ledger is not meant to facilitate general-purpose computation or smart contracts, and only exists as a stripped-down side chain to coordinate technical and economic operations for DoubleZero.