Mechanics

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Deployment and Initial Supply

TOWNS is deployed as an ERC20 token on the Ethereum Mainnet with an initial supply of 10 billion tokens.

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Inflation Process

• Annual Inflation: TOWNS’s supply is inflated once per year through a publicly callable function, ensuring a predictable increase in token supply.
• Minting: This inflation process involves minting new tokens, with the total amount being that one years value of inflation.

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Distribution on Base

• Bridging to Base: TOWNS tokens are distributed on the Base blockchain. This involves either sending TOWNS tokens to a bridge protocol with the final destination being the distribution contract on Base or using a multisig wallet to bridge the tokens over to Base and then forward them to the distribution contract.
• Distribution Contract: The distribution contract on Base must be invoked once per claim cycle. This contract is responsible for allocating rewards based on various factors, including the active Node Operators, their set percentage fees, and the distribution of delegated tokens.

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Reward Allocation and Claiming

• Claim Cycles: Tokens are claimable via the distribution contract at the end of each epoch, aligning reward distribution with the network’s operational cycles.
• Signaling and Reward Adjustment: The protocol incorporates a signaling mechanism for bad node behavior. Reports from other nodes and the DAO regarding misconduct or underperformance are considered in the reward allocation process, ensuring that rewards are distributed fairly and incentivize good behavior.