💪Earning DBT

Note: The numbers in this document are indicative and not final. They reflect the current framework discussed in Townhall 23 and may change based on community feedback and final launch parameters. We recommend reading this alongside the Townhall recording for full context.

This page defines how participants earn DBT tokens through on-chain reward mechanics. Rewards transition in structure over time to align early network bootstrap incentives with long-term utilization efficiency.

Core Reward Pools

The Dabba reward system comprises two primary earning mechanisms:

1. Universal Basic Income (UBI)

2. Performance Pool (PP)

These mechanisms operate with different epochs and weightings:

• Year 1: 100% of rewards are distributed via UBI

• Year 2 onward: PP is enabled alongside UBI, with protocol governance adjusting weighting as network matures

Rewards are distributed at regular epochs (e.g., monthly), computed off-chain, and settled on-chain.

Definitions

Let:

• t = epoch index

• H_t = set of active deployed hotspots in epoch t --> total deployed (sum of hotspots owned by community + foundation)

• R_t = total reward tokens allocated for epoch t

• UBI_t = portion of R_t assigned to UBI

• PP_t = portion of R_t assigned to Performance Pool

• U_i = UBI share for hotspot i

• P_i = performance score for hotspot i

• C_i = coverage score for hotspot i

• D_i = data throughput score for hotspot i

Network governance may adjust relative weights between coverage and throughput in the performance computation.

Year 1 — Universal Basic Income (UBI) Only

For all of Year 1, the entire rewards allocation is distributed via UBI.

Formally:

$$UBI_t = R_t$$

$$PP_t = 0$$

The UBI allocation is distributed equally among all actively participating hotspots:

For hotspot i in H_t:

$$U_i = \frac{UBI_t}{|H_t|}$$

Key properties:

• All hotspots receive a baseline allocation irrespective of usage

• Incentivizes rapid network coverage and bootstrap deployment

• Ensures broad participation in the earliest stage

This creates a uniform token reward floor ideal for the bootstrap phase.

Year 2 Onward: Introduction of Performance Pool

Starting in Year 2, the Performance Pool (PP) is enabled to initiate usage-based reward differentiation.

At epoch t (Year 2+):

$$R_t = UBI_t + PP_t$$

Where:

• UBI_t = UBI portion

• PP_t = Performance Pool portion

Governance may parameterize:

• alpha = fraction of R_t allocated to UBI

• beta = fraction of R_t allocated to PP

• alpha + beta = 1

Example:

$$UBI_t = \alpha \, R_t$$

$$PP_t = \beta \, R_t$$

Protocol governance can adjust alpha and beta over time to balance coverage vs. efficiency incentives.

Performance Pool Scoring

The Performance Pool is allocated proportionally to participant performance metrics including:

• Coverage contribution C_i

• Data throughput D_i

Define the composite performance score:

$$S_i = w_{cov} \cdot C_i + w_{data} \cdot D_i$$

Where:

• w_cov = coverage weight

• w_data = data throughput weight

• w_cov + w_data = 1

The total network performance sum:

$$S_{total} = \sum_{i \in H_t} S_i$$

Then hotspot i’s share of the PP is:

$$P_i = PP_t \cdot \frac{S_i}{S_{total}}$$

Final Reward Computation Per Epoch

For hotspot i:

Year 1 (UBI only)

$$Reward_{i,t} = U_i = \frac{R_t}{|H_t|}$$

Year 2+ (UBI + PP)

$$Reward_{i,t} = UBI_{i,t} + P_i$$

This structure ensures:

• All participants receive a baseline reward

• Higher utilization and coverage are rewarded proportional to contribution

Score Normalization

To prevent score outliers from dominating rewards:

1. Coverage C_i is normalized by maximum theoretical coverage radius.

2. Data throughput D_i is normalized by network capacity bounds.

3. Final performance score S_i is bounded to avoid extreme skew.

Normalization examples:

Let:

• C_max = maximum coverage score

• D_max = maximum throughput score

Then:

$$\tilde{C}_i = \frac{C_i}{C_{max}}$$

$$\tilde{D}_i = \frac{D_i}{D_{max}}$$

Composite performance:

$$S_i = w_{cov} \cdot \tilde{C}_i + w_{data} \cdot \tilde{D}_i$$

Governance Controls

Governance can adjust:

• Relative weights w_cov and w_data

• UBI vs Performance Pool split (alpha and beta)

• Reward epoch timing

• Normalization parameters

These controls provide flexibility for aligning incentives as the network evolves.

Protocol Notes

• Reward computation occurs off-chain and is settled on-chain via a proof of validity

• Rewards are distributed in DBT at the start of the next epoch

• Participants must meet minimum criteria (active, compliant, up-to-date firmware, etc.) to qualify

Transition Rationale

Year 1 UBI-only Phase: Supports maximal coverage, fast deployment, and participant onboarding.

Year 2+ Performance Phase: Introduces usage signals to reward efficiency, throughput, and real utilization.

This two-phase approach balances early growth with long-term operational meritocracy.

Summary

Rewards are designed to:

• Maximize coverage early

• Transition to usage optimization

• Remain flexible via governance

• Scale with network utilization