mint

Mint

The mint module is responsible for creating tokens in a flexible way to reward validators, incentivize providing pool liquidity, provide funds for Merlin governance, and pay developers to maintain and improve Merlin.

The module is also responsible for reducing the token creation and distribution by a set period until it reaches its maximum supply (see reduction_factor and reduction_period_in_epochs)

The module uses time basis epochs supported by the epochs module.

Contents

1. Concept
2. State
3. Begin Epoch
4. Parameters
5. Events
6. Queries

Concepts

The x/mint module is designed to handle the regular printing of new tokens within a chain. The design taken within Merlin is to

• Mint new tokens once per epoch (default one week)
• To have a "Reductioning factor" every period, which reduces the number of rewards per epoch. (default: period is 3 years, where a year is 52 epochs. The next period's rewards are 2/3 of the prior period's rewards)

Reduction factor

This is a generalization over the Bitcoin-style halvenings. Every year, the number of rewards issued per week will reduce by a governance-specified factor, instead of a fixed 1/2. So RewardsPerEpochNextPeriod = ReductionFactor * CurrentRewardsPerEpoch). When ReductionFactor = 1/2, the Bitcoin halvenings are recreated. We default to having a reduction factor of 2/3 and thus reduce rewards at the end of every year by 33%.

The implication of this is that the total supply is finite, according to the following formula:

Total Supply = InitialSupply + EpochsPerPeriod * { {InitialRewardsPerEpoch} / {1 - ReductionFactor} }

State

Minter

The Minter is an abstraction for holding current rewards information.

type Minter struct {
    EpochProvisions sdk.Dec   // Rewards for the current epoch
}

Params

Minting Params are held in the global params store.

LastReductionEpoch

Last reduction epoch stores the epoch number when the last reduction of coin mint amount per epoch has happened.

Begin-Epoch

Minting parameters are recalculated and inflation is paid at the beginning of each epoch. An epoch is signaled by x/epochs

NextEpochProvisions

The target epoch provision is recalculated on each reduction period (default 3 years). At the time of the reduction, the current provision is multiplied by the reduction factor (default 2/3), to calculate the provisions for the next epoch. Consequently, the rewards of the next period will be lowered by a 1 - reduction factor.

EpochProvision

Calculate the provisions generated for each epoch based on current epoch provisions. The provisions are then minted by the mint module's ModuleMinterAccount. These rewards are transferred to a FeeCollector, which handles distributing the rewards per the chain's needs. This fee collector is specified as the auth module's FeeCollector ModuleAccount.

Network Parameters

The minting module contains the following parameters:

Below are all the network parameters for the mint module:

• mint_denom - Token type being minted
• genesis_epoch_provisions - Amount of tokens generated at the epoch to the distribution categories (see distribution_proportions)
• epoch_identifier - Type of epoch that triggers token issuance (day, week, etc.)
• reduction_period_in_epochs - How many epochs must occur before implementing the reduction factor
• reduction_factor - What the total token issuance factor will reduce by after the reduction period passes (if set to 66.66%, token issuance will reduce by 1/3)
• distribution_proportions - Categories in which the specified proportion of newly released tokens are distributed to
  • staking - Proportion of minted funds to incentivize staking MER
  • pool_incentives - Proportion of minted funds to incentivize pools on Merlin
  • developer_rewards - Proportion of minted funds to pay developers for their past and future work
  • community_pool - Proportion of minted funds to be set aside for the community pool
• weighted_developer_rewards_receivers - Addresses that developer rewards will go to. The weight attached to an address is the percent of the developer rewards that the specific address will receive
• minting_rewards_distribution_start_epoch - What epoch will start the rewards distribution to the aforementioned distribution categories

Notes

1. mint_denom defines denom for minting token - umer
2. genesis_epoch_provisions provides minting tokens per epoch at genesis.
3. epoch_identifier defines the epoch identifier to be used for the mint module e.g. "weekly"
4. reduction_period_in_epochs defines the number of epochs to pass to reduce the mint amount
5. reduction_factor defines the reduction factor of tokens at every reduction_period_in_epochs
6. distribution_proportions defines distribution rules for minted tokens, when the developer rewards address is empty, it distributes tokens to the community pool.
7. weighted_developer_rewards_receivers provides the addresses that receive developer rewards by weight
8. minting_rewards_distribution_start_epoch defines the start epoch of minting to make sure minting start after initial pools are set

Events

The minting module emits the following events:

End of Epoch

Queries

params

Query all the current mint parameter values

query mint params

::: details Example

List all current min parameters in json format by:

merlind query mint params -o json | jq

An example of the output:

{
  "mint_denom": "umer",
  "genesis_epoch_provisions": "821917808219.178082191780821917",
  "epoch_identifier": "day",
  "reduction_period_in_epochs": "365",
  "reduction_factor": "0.666666666666666666",
  "distribution_proportions": {
    "staking": "0.250000000000000000",
    "pool_incentives": "0.450000000000000000",
    "developer_rewards": "0.250000000000000000",
    "community_pool": "0.050000000000000000"
  },
  "weighted_developer_rewards_receivers": [
    {
      "address": "mer14kjcwdwcqsujkdt8n5qwpd8x8ty2rys5rjrdjj",
      "weight": "0.288700000000000000"
    },
    {
      "address": "mer1gw445ta0aqn26suz2rg3tkqfpxnq2hs224d7gq",
      "weight": "0.229000000000000000"
    },
    {
      "address": "mer13lt0hzc6u3htsk7z5rs6vuurmgg4hh2ecgxqkf",
      "weight": "0.162500000000000000"
    },
    {
      "address": "mer1kvc3he93ygc0us3ycslwlv2gdqry4ta73vk9hu",
      "weight": "0.109000000000000000"
    },
    {
      "address": "mer19qgldlsk7hdv3ddtwwpvzff30pxqe9phq9evxf",
      "weight": "0.099500000000000000"
    },
    {
      "address": "mer19fs55cx4594een7qr8tglrjtt5h9jrxg458htd",
      "weight": "0.060000000000000000"
    },
    {
      "address": "mer1ssp6px3fs3kwreles3ft6c07mfvj89a544yj9k",
      "weight": "0.015000000000000000"
    },
    {
      "address": "mer1c5yu8498yzqte9cmfv5zcgtl07lhpjrj0skqdx",
      "weight": "0.010000000000000000"
    },
    {
      "address": "mer1yhj3r9t9vw7qgeg22cehfzj7enwgklw5k5v7lj",
      "weight": "0.007500000000000000"
    },
    {
      "address": "mer18nzmtyn5vy5y45dmcdnta8askldyvehx66lqgm",
      "weight": "0.007000000000000000"
    },
    {
      "address": "mer1z2x9z58cg96ujvhvu6ga07yv9edq2mvkxpgwmc",
      "weight": "0.005000000000000000"
    },
    {
      "address": "mer1tvf3373skua8e6480eyy38avv8mw3hnt8jcxg9",
      "weight": "0.002500000000000000"
    },
    {
      "address": "mer1zs0txy03pv5crj2rvty8wemd3zhrka2ne8u05n",
      "weight": "0.002500000000000000"
    },
    {
      "address": "mer1djgf9p53n7m5a55hcn6gg0cm5mue4r5g3fadee",
      "weight": "0.001000000000000000"
    },
    {
      "address": "mer1488zldkrn8xcjh3z40v2mexq7d088qkna8ceze",
      "weight": "0.000800000000000000"
    }
  ],
  "minting_rewards_distribution_start_epoch": "1"
}

:::

epoch-provisions

Query the current epoch provisions

query mint epoch-provisions

::: details Example

List the current epoch provisions:

merlind query mint epoch-provisions

As of this writing, this number will be equal to the genesis-epoch-provisions. Once the reduction_period_in_epochs is reached, the reduction_factor will be initiated and reduce the amount of MER minted per epoch. :::

Appendix

Current Configuration

mint module: Network Parameter effects and current configuration

The following tables show overall effects on different configurations of the mint related network parameters: