Future NuNet Token
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The Future NuNet token is based on generalized mining of native cryptographic tokens and their distribution to constituents of the network in exchange for the active participation in network’s operation and development.
The issuance of NuNet native utility tokens will be related to the amount of computational work performed within the network, following principles of generalized mining and the quantity theory of money. The total supply of tokens in the global economy of decentralized computing will be backed by the number of useful computational work and transactions carried out in the network at every moment, providing the fundamental basis for their sustainable value.
Generalized mining (also called Mining 2.0) is a mechanism where supply-side and other services are provided to the market by a third party in exchange for compensation of the network’s native currency. Bitcoin’s proof-of-work mining is the prototypical example of generalized mining, where miners compete to find a nonce value such that the resulting hash of the block header is below a target value. All Bitcoin miners, however, use the same algorithm in order to compete.
In contrast with distributed ledger technologies, like Bitcoin, Ethereum, and others, token mining in NuNet framework is not based on a single (yet distributed) algorithm nor requires global eventual consistency. In a decentralized computation framework that NuNet is, consistency is required only at the local level of each computational workflow -- which could be wildly diverse -- while global consistency is not required nor desirable. NuNet will ensure the required local consistency via a set of smart contracts, governing construction, execution, and dissolution of computational workflows, and settling involved transactions. Naturally, tokenomic transactions between constituents of the NuNet framework will be performed on blockchains offering global eventual consistency and appropriate guarantees.
NuNet’s internal tokenomic mechanism may combine a combination of the following aspects:
A chosen measure of computing work, consistently used by all compute providers registered in the network. NuNet network-wide telemetry information, supported by the Telemetry API, will necessarily include this information and will be used by network operations agents to quantify computational work involved in any specific workflow as well as by compute providers to quantify their capacities. NuNet Telemetry API will have the ability to calculate and return the measure of computational work involved in every transaction. This measure may be a combination of CPU, RAM, network usage, and disk storage units or a single unit of computational work such as [tera]FLOPS.
Smart contracts, implemented on all blockchains enabled by NuNet which will allow network operations agents to negotiate, lock and settle transactions related to computational workflows between components of the ecosystem. Initially, smart contracts will be written for the Cardano and Ethereum blockchains [1] [2] [3] and work together with SingularityNET’s platform contracts, but in the long term will expand to other blockchains, as required by framework development. NuNet also considers leveraging collaborations with other frameworks and solutions, e.g. Ocean Protocol’s Service Execution Agreements.
A variant of the proof-of-receipt algorithm which will instruct smart contract to release funds reserved and approved in a contract binding all parties of a computational workflow only after valid results of the subscribed computational process are properly received and validated.
A reputation system which will provide a basis for informal and community ecosystem driven verification, validation and trust of supply-side service providers. NuNet framework will provide guaranteed general mechanisms and information flows (Reputation API and Telemetry API) needed for reputation systems and their algorithms. Initially, NuNet will build a prototypical reputation system for bootstrapping the network operation; in the long term, however, the framework will encourage third party AI service providers to implement competing reputation systems as network operations agents and compete for best and most reliable reputation services -- eventually leading to a dynamically evolving reputation ecosystem.
The following payment logic implemented by NuNet smart contracts:
A considerable portion of computational workflows initiated within NuNet will involve crypto-token payments from consumers to providers via mediation of network operations agents;
NuNet will provide interoperability among decentralized computing frameworks and therefore transactions in native NuNet tokens will be closely related to transactions in native tokens of these frameworks. NuNet will provide a unified mechanism for executing multi token transactions (e.g. ERC-1155 based) that bundle NuNet token with all involved tokens/crypto-currencies so that it precisely matches the unique nature of each transaction.
The following generalized mining logic is implemented by NuNet smart contracts:
A fixed amount of new NuNet tokens will be mined for each unit of computing performed by a validated computational process upon release of funds reserved for each transaction;
Newly minted tokens may be distributed to compute providers (most part), NuNet organization (as a form of ‘network fee’) and possibly other constituents of the network according to actual computational work spent on executing useful computational tasks. NuNet also may incentivize other supply-side services if considered necessary for facilitating the development and supply/demand balance within the network.
The adaptive mining reward rate (i.e. amount of NuNet tokens rewards relatively to completed computational work) which will initially be set to decrease on average by the factor of 2 in 2 years, roughly compensating for increase in computing efficiency. To that end, in order to account for actual progress of computing technology and balance the NuNet tokenomy:
NuNet may create a frequently updated composite computing price index which will track the average price of computing on selected cloud computing engines and scientific computing platforms.
Initially, the index will follow a predetermined function (a variant of a bonding curve), which fixes the continuously decreasing mining rate;
An adaptive mining rate can be seen as an evolution of the ‘halving’ rate of Bitcoin. NuNet will adjust the mining rate as per the above considerations in order to balance the supply and demand within the NuNet ecosystem to the realities of the overall computing industry of the world. These decisions will be taken following NuNet’s governance and management mechanism described below.
The NuNet internal tokenomics, combining proof of receipt, reputation systems, payment logic, and generalized mining mechanism will ensure that new tokens are mined and rewarded only if the physical computation actually happened, is useful for constituents of the workflow, and the related payment transactions are approved. The mechanism is conceived to facilitate the stable growth of the network via balancing supply-side incentives, token inflation, and paying demand for decentralized computing resources. The mechanism will be flexible so that it allows context-dependent adaptation and evolution facilitated by NuNet’s governance and management.
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