TEA Project’s Economic Innovations

TEA Project has designed its tokenomics with an eye on incentivizing positive outcomes in the ecosystem. This starts with our main TEA token, which has been designed with computational resource usage in mind. We also feature bonding curves, expiring NFTs, and novel taxation schemes in our token economy. Taking a closer look at our various tokenized entities will reveal the innovations that are empowering the next wave of TEA explorers to be profitable members of the TEA community.

TEA Token

The TEA token is tied to computing resources, i.e. a certain number of CPU time, memory and storage occupied, network traffic used etc. will have a set price in terms of TEA. Stated differently, spending a TEA token will always result in a fixed consumption amount of computing services.

Users new to the TEA ecosystem can think of it this way: for a specific computing task, the TEA cost to run that task will be stable. That is, whenever you wish to run the same computing task, it will cost the same amount of TEA. But this doesn’t mean that the T token is stable to relative to something like the dollar. The TEA Project will ultimately need devs and users to join its network and introduce demand for the TEA token to support its price.

There’s a total of 100 million TEA tokens which is also the cap. There’s no inflation as mining rewards for public services come from both the DAO treasury and the Harberger Tax.

CML NFT

Camellia (CML) is an NFT that dies with each CML having a varying lifespan of approximately 2 years. Through the CML NFT’s metadata a record of its performance will be kept along with any special features the current miner has (e.g. an onboard TPU).

CML are algorithmically produced according to compute demand. To continue with the yin/yang metaphor in comparison to the TEA token, CML supply is tied to compute demand while TEA demand is tied to the stable amount of compute resources it can command.

Successful miners will be inclined to buy more Camellia (CML) seeds to plant more mining machines. The major driver of CML demand will be demand for computing power on the network. As more demand develops for TEA’s decentralized compute infrastructure, the more miners will be inclined to bid for CML to earn a share of the gas being spent on the network.

Bonding Curve

Bonding curve tokens provide an ideal vehicle for users to share in the wealth generation of certain entities while ensuring there are funds locked in the contract should they wish to sell. In the TEA Project, we use bonding curve tokens for TApp tokens and for CML node tokens.

TApp Tokens

TApp developers have access to bonding curves to mint TApp tokens and generate investment in their TApp. This funding mechanism allows TApps to leverage expected future revenue into early development funding. And interested community members can be early investors in a TApp where each subsequent usage of the TApp results in a bonding curve token dividend to all token holders.

• End-user pays TEA to use a TApp.
• The payment (net of the gas fee which goes to CML miners) goes into that TApp’s bonding curve.
• The theta % is paid directly to the TApp developer.
• Everything net of the theta % payment becomes a consume event into the bonding curve.
• This consume event generates new bonding curve tokens which are distributed proportionally to the existing holders.

CML bonding curve tokens are similar except they allow any of its token holders to share in the profit of a particular CML miner.

Harberger Tax

Harberger taxation governs the scarce resource of the state maintainer nodes that collectively run TEA’s state machine. Given that the TEA Project had a scarce public resource, the question arose of how best to charge for this. Our solution was to charge a Harberger Tax for the privilege of running a state maintainer node.

• The state maintainer nodes earn the memory tax paid by TApps as their sole source of revenue.
• The owner of a state maintainer node pays a % tax on whatever they think their ownership of the node is worth in TEA.
• Anyone can buy your state maintainer node away from you by bidding 1T higher than your self-valuation price.

The dilemma of the Harberger Tax becomes clear: put your self-valuation too low and someone will purchase it away from you. Placing it above the prevailing market price will give you a better chance of holding onto it at the cost of paying a higher Harberger Tax rate. There should be in theory an equillibrium price where running a state maintainer node is net profitable relative to its Harberger Tax expenses. The more participants there are in this market, the thinner the margines likelier are.

Conclusion

These token innovations help create a thriving ecosystem whereby endusers, miners, devs, and investors all are incentivized towards actions that bring the ecosystem towards a more healthy state. That said, the values of TEA and CML, and the bonding curve tokens of the various TApps, will ultimately need to be supported by businesses needing decentralized cloud computing on the TEA Project.