papers/hanzo-aci/sections/07-token-economics.tex

\section{Token Economics}

\label{sec:tokenomics}

\subsection{ACI Token}

The ACI token serves four functions:

\begin{enumerate}[leftmargin=1.4em]
    \item \textbf{Payment}: Clients pay for compute in ACI tokens.
    \item \textbf{Staking}: Workers and validators stake ACI tokens as collateral.
    \item \textbf{Governance}: Token holders vote on protocol upgrades and parameters.
    \item \textbf{Fee burning}: A fraction of transaction fees is burned, creating deflationary pressure proportional to network usage.
\end{enumerate}

\subsection{Fee Distribution}

Transaction fees are distributed as follows:

\begin{table}[H]
\centering
\begin{tabular}{lc}
\toprule
\textbf{Recipient} & \textbf{Share} \\
\midrule
Worker (compute provider) & 80\% \\
Validators (consensus) & 8\% \\
Verifiers (PoAI verification) & 5\% \\
Liquidity providers (HMM) & 4\% \\
Protocol treasury (burn) & 3\% \\
\bottomrule
\end{tabular}
\caption{Fee distribution structure.}
\label{tab:fees}
\end{table}

\subsection{Staking Economics}

\begin{table}[H]
\centering
\small
\begin{tabular}{lccc}
\toprule
\textbf{Role} & \textbf{Min. Stake} & \textbf{Expected APY} & \textbf{Slash Risk} \\
\midrule
Validator & 100K ACI & 8--12\% & Low (Byzantine) \\
Worker & 10K ACI & 15--25\% & Medium (quality) \\
Verifier & 50K ACI & 10--15\% & Low \\
LP (HMM) & 1K ACI & 12--18\% & IL risk \\
\bottomrule
\end{tabular}
\caption{Staking requirements and expected returns.}
\label{tab:staking}
\end{table}