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. This inflation rate can only be lowered via an onchain governance vote.
• 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. Tokens are minted via the inflation function on the mainnet Towns contract and bridged via the Base Standard Bridge to the origin contract of the Towns Treasury contract which supplies the Rewards 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 supplied to the Distribution contract on a biweekly cadence and tokens are claimable via the Distribution contract at any time by the beneficiary or authorized claimer specified when staking.
• 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 will be considered in the reward allocation process, ensuring that rewards are distributed fairly and incentivize good behavior.