# LCO Reward Specification #### Local Cable Operator (LCO) Reward Specification A Local Cable Operator (LCO) is a network participant responsible for on-ground infrastructure deployment, management, and operational support of broadband connectivity within a given area. An LCO earns DBT tokens for enabling physical connectivity that supports hotspots, backhaul, and end-user traffic. This section describes how LCOs earn DBT, including eligibility criteria, calculation methodology, and settlement mechanics. ### Eligibility To qualify for reward allocation in epoch t, an LCO must: * Be registered and validated on-chain * Provide documented operational support data for hotspots under its scope * Maintain compliance with performance and uptime requirements * Pass protocol integrity checks Non-compliant or incomplete entries are excluded from reward calculations for that epoch. ### Reward Components LCOs earn rewards from the protocol based on: 1. **UBI Allocation Component** 2. **Performance Pool (PP) Component** The relative contribution of each component depends on the protocol phase: * **Year 1:** 100% UBI * **Year 2 onward:** UBI + PP Each epoch’s total reward allocation assigned to LCOs is derived from the global reward pool emitted by the protocol. ### Year 1: Universal Basic Income (UBI) During Year 1, all epoch reward allocation is distributed via UBI.\ Let: * R\_t = total reward tokens assigned to LCOs in epoch t * L\_t = total number of eligible LCO entries in epoch t Then each LCO i receives: $$ Reward\_{LCO,i,t} = \frac{R\_t}{L\_t} $$ This structure incentivizes early network coverage, broad deployment participation, and rapid onboarding of operational partners. ### Year 2 Onward: UBI + Performance Pool (PP) Beginning in Year 2, LCO rewards follow a hybrid allocation structure with two components: * **UBI Component:** fixed baseline share of $R\_t$ * **Performance Pool Component:** usage and contribution based share Let: * UBI\_t = alpha , R\_t * PP\_t = beta , R\_t * alpha + beta = 1 Governance can tune alpha and beta to balance coverage incentives vs performance incentives. ### Performance Metrics LCO performance is quantified using two primary scores: 1. **Coverage Contribution C\_LCO,i**\ Measures the extension and density of network infrastructure supported by the operator. 2. **Support Throughput D\_LCO,i**\ Captures aggregate traffic volume sustained by hotspots under the operator’s management. A composite score for each LCO $i$ is defined: $$ S\_{LCO,i,t} = w\_{cov} \cdot \tilde{C}*{LCO,i,t} + w*{data} \cdot \tilde{D}\_{LCO,i,t} $$ #### Normalization Let: * C\_max,t = maximum coverage score among eligible LCOs in epoch t * D\_max,t = maximum throughput score among eligible LCOs in epoch t Then: $$ \tilde{C}*{LCO,i,t} = \frac{C*{LCO,i,t}}{C\_{max,t}} $$ $$ \tilde{D}*{LCO,i,t} = \frac{D*{LCO,i,t}}{D\_{max,t}} $$ This prevents single outliers from skewing the pool. *** ### Performance Pool Allocation For each LCO i, the PP reward is: Let S\_total,t be the sum of composite scores across all eligible LCOs: $$ S\_{total,t} = \sum\_{j=1}^{L\_t} S\_{LCO,j,t} $$ Then LCO $i$’s share of the PP pool is: $$ P\_{LCO,i,t} = PP\_t \cdot \frac{S\_{LCO,i,t}}{S\_{total,t}} $$ *** ### Total Reward Per Epoch **Year 1 (UBI only):** $$ Reward\_{LCO,i,t} = \frac{R\_t}{L\_t} $$ **Year 2+ (UBI + PP):** $$ Reward\_{LCO,i,t} = \frac{UBI\_t}{L\_t} + P\_{LCO,i,t} $$ Where: * frac\_UBI\_t,L\_t is the baseline shared equally * P\_LCO,i,t is the performance-weighted component This ensures LCO contributions are rewarded both for participation and measurable impact. *** ### Settlement Mechanics * Reward calculations are performed off-chain in each epoch * Results are submitted on-chain as a single epoch settlement transaction * Final rewards are minted or released in DBT at the start of the next epoch * Each settlement logs per-operator allocations for transparency and auditing *** ### Example (Year 2+) Suppose: * Epoch reward allocated to LCOs: R\_t = 100,000 DBT * UBI weight alpha = 0.40 * PP weight beta = 0.60 * Total eligible LCOs: L\_t = 100 UBI component: $$ UBI\_t = 0.40 \times 100{,}000 = 40{,}000 $$ Baseline per LCO: $$ \frac{40{,}000}{100} = 400 \text{ DBT} $$ Assume normalized composite score for LCO i is 0.015 and total network score is 1.000: PP portion: $$ P\_{LCO,i,t} = 60{,}000 \times \frac{0.015}{1.000} = 900 \text{ DBT} $$ Total reward: $$ Reward\_{LCO,i,t} = 400 + 900 = 1{,}300 \text{ DBT} $$ *** ### Governance Controls Governance parameters that may be tuned include: * UBI vs PP split \alpha, \beta * Coverage vs throughput weight w\_{cov}, w\_{data} * Epoch timing * Normalization ceilings These parameters enable protocol evolution while maintaining a transparent and measurable reward structure. ### Compliance Notes * Only active and verified LCOs are eligible for rewards * Data feeds for coverage and throughput must be validated * Failure to meet compliance thresholds results in exclusion from that epoch’s settlement --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://gitbook.dabba.network/earning-dbt/lco-reward-specification.md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.