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Adjusted total supply

Adjusted total supply is a concept of total supply with consideration of fee market.

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 may also implement a treasury and voluntary 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 adjusted total supply. Adjusted total supply is the actual eventual total supply of a blockchain, with considerations of fee market and other coin burning methods.

Reaching fixed adjusted total supply

To reach fixed adjusted 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 adjusted total supply.