papers/zip-002-zen-reranker/sections/08-economic-model.tex

\section{Economic Model}


\subsection{Inference Costs}

\textbf{Cloud Deployment (Hanzo Network):}
\begin{itemize}
\item Hardware: 1$\times$ A100 40GB per inference node
\item Throughput: 500 embeddings/second
\item Latency: 21.5ms per embedding (including BitDelta compression)
\item Cost: \$0.0001 per embedding
\item SLA: 99.9\% uptime
\end{itemize}

\textbf{Local Deployment (Edge):}
\begin{itemize}
\item Quantization: 4-bit GPTQ (2GB VRAM)
\item Hardware: RTX 4090, Apple M3 Max, or equivalent
\item Throughput: 50 embeddings/second
\item Latency: 21.5ms per embedding
\end{itemize}

\subsection{Contributor Incentives}

Contributors earn rewards proportional to experience usage:

\begin{equation}
\text{Reward}_i = \alpha \cdot \text{Usage}_i + \beta \cdot \text{Quality}_i
\end{equation}

where:
\begin{itemize}
\item $\text{Usage}_i$: Number of times experience $i$ retrieved in past epoch
\item $\text{Quality}_i$: DAO governance votes for experience $i$
\item $\alpha, \beta$: Tunable parameters (default: $\alpha=0.7, \beta=0.3$)
\end{itemize}

\textbf{Reward Distribution:}
\begin{equation}
\text{ZOO}_i = \frac{\text{Reward}_i}{\sum_j \text{Reward}_j} \times \text{Total Epoch Rewards}
\end{equation}

\textbf{Revenue Sources:}
\begin{itemize}
\item Query fees: \$0.0001 per embedding retrieval
\item API subscriptions: \$100/month for 1M queries
\item Enterprise licenses: Custom pricing
\end{itemize}

\subsection{Network Economics}

\textbf{Revenue Distribution:}
\begin{itemize}
\item 50\% - Zoo DAO treasury (infrastructure, development)
\item 25\% - Experience contributors (proportional to usage)
\item 15\% - Inference node operators (Byzantine-robust validation)
\item 10\% - Research grants (ZKP, privacy, scaling)
\end{itemize}

\textbf{Token Utility (ZOO):}
\begin{itemize}
\item \textbf{Governance:} Vote on experience curation, protocol upgrades
\item \textbf{Staking:} Earn yield from network fees (5-10\% APR)
\item \textbf{Payment:} Pay for API access (discounts vs. fiat)
\item \textbf{Collateral:} Bonding for inference node operation
\end{itemize}