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Articles tagged with "economics"

Multiple Concurrent Leaders Can Save Decentralization

From fighting sandwiching to democratizing trading opportunities, the multiple concurrent leaders model is full of promises. But there is one underappreciated advantage: it makes geography an explicit dimension of competition and so organically incentivizes a decentralized chain. To those who dream of expanding validator sets to the frontiers of the world, this upgrade over the single leader model of today is the solution. Centralizing forces on validators Every validator faces the same calcu

Jun 18, 2025•4 min read

Proof of Utility

Proof of work (PoW) and proof of stake (PoS) systems dominate crypto. But before blindly forking either for DoubleZero, we wanted to understand from first principles: which system delivers a dynamic and sustainable network? Surprisingly, neither does — although in different ways. With their fixations on capital only, proof of stake systems have difficulties in unlocking value across both contribution type and time. Proof of work systems are better in this regard, but still imperfect. They suita

Jun 05, 2025•7 min read

Integrity in the Rewards Model

Overview The economic model for DoubleZero rewards has two potential vulnerabilities: the inorganic traffic problem and the over-concentration problem. With respect to the former, network contributors are potentially incentivized to send inorganic traffic over lines they operate, to earn an outsized share of the rewards. With respect to the latter, the token supply may concentrate in the relatively small set of network contributors over time, given their abilities to earn continuous rewards onc

May 29, 2025•4 min read

Dissuading Inorganic Traffic

Overview As discussed in Integrity in the Rewards Model, the economic model for DoubleZero rewards has two potential vulnerabilities, one of which is the inorganic traffic problem. Network contributors are potentially incentivized to send inorganic traffic over lines they operate, as the boost in rewards they receive outweighs the cost of sending traffic. Conceptually, this is because there is a disconnect between fees and rewards. As discussed in Rewards to Network Contributors, the details o

Mar 31, 2025•6 min read

Inflation and Network Security

Overview As a decentralized protocol, DoubleZero requires public goods — around processing the DoubleZero chain, managing the routing logic, running the activator service, calculating the rewards distribution to network contributors, and more — to function and thrive. These public goods in turn require both compute and security, provided by a system of validators and stakers. Inflation is the mechanism to incentivize them holistically, as the broad transfer of value from the token community to

Mar 27, 2025•3 min read

The Duality of DoubleZero Staking

Overview There are two ways to operationalize staking in crypto-economic systems. In one model, stake matters in relative terms, such that entities that stake more should be given more responsibility in the network. In another model, stake matters in absolute terms, such that entities that clear some threshold should be given as much responsibility as they can handle. More subtly, the question around which model to use is tied to whether responsibilities are homogeneous or heterogeneous. If re

Mar 27, 2025•4 min read

Rewards to Network Contributors

Introduction To the best of its abilities, the DoubleZero network abstracts connectivity away for end users. All else equal, a packet of information that travels from London to Frankfurt on a well-traveled line pays the same as a packet that travels to Sao Paolo on an infrequently-used line. But underneath the hood, connectivity matters greatly and the DoubleZero system aims to incentivize performance from it network contributors. Connections that have high throughput and low latency should be

Feb 16, 2025•13 min read