# 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