💪Earning DBT

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