Burning Mechanisms

Similar to the EIP-1559 model in Ethereum, Navy implements a token burn mechanism. When users pay for AI inference, a portion of the $NAVY payment is permanently removed from circulation.

The balance between token creation and burning is closely tied to network activity. During periods of high usage, the rate of token burning can exceed the rate of new token creation. This will potentially lead the NavyAI into a deflationary phase. This mechanism helps in regulating the token supply, and aligns the token value with the actual demand within the network.

Bribes and (3,3)

“Bribes” were a term first coined by users of DeFi, more specifically, by those of Curve Finance. These bribes are actually gamified incentivizes that help direct rewards for liquidity pools, in exchange for an incentive. We draw inspiration from the bribing mechanism of Curve, and apply it in boosted POW mining in NavyAI.

Miners have the option to set a specific percentage of their mining rewards as a bribe to attract stakers. A staker may choose the miner with the highest bribe, but other factors should also affect the staker's choice such as miner's hardware performance and uptime.

Miners are incentivized to bribe because a higher stake in the miner node will result in higher mining efficiency. It creates a competitive yet cooperative environment where miners and stakers are aligned to provide better service to the network.

With this game theory-inspired (3,3) mechanism, we create an alignment between miners and token holders who take actions to achieve the best collective outcomes.