Effective total supply

Effective total supply is a concept of total supply with consideration of fee market. Kulupu currently has an effective total supply of 75 million KLP, after referendum #26 has passed.

Kulupu implements fee market, which is a method to have more predictable transaction fees. With this method, the base transaction fees are burned instead of paid to miners. Miners only retain the tips. Burning the base fee is important as it avoids giving miners incentives to create artifical transactions to manipulate the fee.

Kulupu also implements a treasury and miner reward taxation system. With this implementation, the treasury funding gets burned every spending cycle.

In a proof of work blockchain, a popular theme is total supply, in which block rewards initially dominate, and then gradually switch to a fee only system. However, with burning methods like fee market and treasury spending, a direct translation of total supply will result in deflation.

Definition

Instead of a definite total supply, here we propose a concept called effective total supply. Effective total supply is the actual eventual total supply of a blockchain, with considerations of fee market and other coin burning methods.

Reaching fixed effective total supply

To reach fixed effective total supply, we assume normal usage of Kulupu blockchain. That is, each block is on average half full of its block weight limit. A block half full would burn 8 KLP. As a result, any emission scheme with eventual tail emission of equal or less than 8 KLP can be considered to have fixed effective total supply.

Current schedule

The current reward schedule table is as follows. Note that the tail emission of 1.5 KLP is well below the estimated burn rate of 8 KLP, which will result in deflation. However, the decmoracy module in Kulupu can always adjust the table in the future, in order to improve the situation.

Table 1. Table Emission
Start block	Count	Reward
0 (era 1)	320000	60
0 (era 2)	200000	60
200000	5600	54
205600	344400	30
550000	250000	24
800000	250000	21
1050000	250000	18
1300000	250000	15
1550000	250000	12
1800000	250000	9
2050000	250000	6
2300000	250000	3
2550000	250000	1.5