Qubic (QUBIC) Tokenomics

Issuance Mechanism

• Weekly Emissions: Qubic emits 1 trillion QUBIC per week.
• Supply Cap: The original hard cap was 1,000 trillion QUBIC, but this was reduced by 80% to a new cap of 200 trillion QUBIC as part of "Project X" in August 2024. The cap is enforced by a smart contract and is expected to be reached around 2041, though ongoing burns make reaching the cap unlikely.
• Halving Schedule: The emission model includes a 15% reduction in emissions in the first year, followed by annual halvings (similar to Bitcoin), with the "Supply Watcher" mechanism dynamically adjusting emissions to account for tokens burned through network activity.

Allocation Mechanism

• Fair Launch: Qubic was launched without venture capital or pre-mines; all tokens are distributed through mining and protocol incentives.
• Computor Controlled Fund (CCF): 8% of weekly emissions are allocated to the CCF, a community treasury supporting development, marketing, grants, and ecosystem growth. The allocation can be adjusted by network governance.
• Smart Contract IPOs: New smart contracts (e.g., DEXs, oracles) are launched via IPOs, where 676 shares are sold for QUBIC. The QUBIC spent is locked in the contract, reducing circulating supply and funding contract execution.

Usage and Incentive Mechanism

• Network Utility: QUBIC is used for:
  • Paying for computation and smart contract execution (burned in the process).
  • Participating in governance and voting.
  • Acquiring shares in smart contract IPOs, which can generate passive income.
  • Staking for network security and rewards.
• QEarn Program: Users can lock QUBIC for up to 52 weeks to earn yield. Early unlocks are allowed but result in reduced rewards, with a portion of unearned rewards burned and the rest redistributed to other participants.
• Deflationary Pressure: The burn mechanism is central—QUBIC is burned with every smart contract execution and early unlock, reducing supply and counteracting inflation from emissions.

Locking Mechanism

• QEarn Locking: Users can lock QUBIC for flexible durations (up to 52 weeks) to earn rewards. The longer the lock, the higher the APY.
• Early Unlocks: Allowed at any time, but with a penalty—unearned rewards are partially burned and partially redistributed, incentivizing longer-term participation.
• Smart Contract Locking: QUBIC used to purchase IPO shares is locked in the contract, reducing circulating supply.

Unlocking Time

• QEarn: Full rewards are distributed at the end of the 52-week lock. Early unlocks receive pro-rata rewards, with penalties applied.
• No Fixed Vesting for Team/VCs: As Qubic was fair-launched, there are no team or VC vesting schedules.

Qubic Tokenomics Table

Additional Insights

• Burn Mechanism: Qubic’s burn model is highly adaptive. As network usage increases, more QUBIC is burned, which can offset emissions and even lead to net deflation.
• Governance: The community (computors and shareholders) can vote to adjust emission and burn parameters, ensuring adaptability.
• Ecosystem Growth: The CCF and grant programs are designed to bootstrap development and incentivize long-term ecosystem health.
• Transparency: Qubic is fully open source, and all emission, burn, and allocation data are on-chain and auditable.

Implications and Scenarios

• Sustainability: The combination of aggressive burning, dynamic emission reduction, and community-driven allocation aims to create a sustainable, deflationary token economy.
• Incentive Alignment: By rewarding long-term locking and penalizing early withdrawals, Qubic aligns incentives for holders, stakers, and developers.
• Market Impact: The reduction in max supply and ongoing burns could create upward price pressure if network adoption and utility continue to grow.

Limitations

• No Team/VC Vesting: The absence of traditional vesting schedules means there is no risk of large unlocks from insiders, but also no structured long-term team incentive beyond mining and community rewards.
• Dynamic Model: The actual circulating supply and inflation/deflation rate will depend on real-time network usage and governance decisions.

References for Further Reading

• Qubic Project X: Emission Model and Supply Cap
• QEarn: Locking Coins for Yield
• Qubic’s Revolutionary Tokenomics and Halvings
• Qubic Docs: Use Cases
• Qubic Docs: Random Contract and Burn Mechanism

Summary:
Qubic’s tokenomics are designed for long-term sustainability, with a capped and deflationary supply, community-driven allocation, and robust incentive mechanisms for both users and developers. The system’s flexibility and transparency, combined with innovative features like QEarn and the CCF, position Qubic as a unique experiment in decentralized, adaptive token economics.