Rewards and Incentives

What is the difference between TOTO (core asset) and POTENTIAL, and how are they earned?

• TOTO (Core Asset): This is the main transferable asset of the Toto Chain. It can be traded, transferred, or used to pay for network fees.

• POTENTIAL: A non-transferable asset that can only be used for network fees and referring new users. It decays over 28 days if not used.

Earning Mechanisms:

• Block producers earn POTENTIAL by signing transactions and generating new blocks​.

• TOTO (Core Asset) is earned by submitting fractional NFTs (fNFTs) to the reward system. Block producers collect fNFTs, and when they accumulate enough, they can exchange them for core assets.

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How is the core asset claimed by a user calculated?

When someone submits fractional NFTs (fNFTs), the rewards they can claim depend on:

1. The number of fNFTs submitted – Users need to collect a complete set to claim the full NFT.

2. The amount in the reward pool – The available core asset in the pool at the time of claiming.

3. The number of users referred – A user's referral history influences their reward potential.

4. Random selection – Since fNFTs are distributed randomly, acquiring a full set can take time​.

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How are rewards for block production calculated and distributed?

• Block producers earn POTENTIAL after producing blocks. The total POTENTIAL to be distributed is divided by the expected number of blocks over a given period​.

• Block producers also receive fNFTs as additional rewards. These can later be converted into core assets by submitting a full set​.

• POTENTIAL decays over time (28 days), encouraging continuous participation​.

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What is the halving mechanism for rewards, and how does it work?

• The TOTO rewards follow a halving cycle every 28 days (called Liquidity Halving).

• Each cycle, the amount of core assets in the reward pool available for claims is cut in half.

• There is a total of 13 halving cycles, after which unclaimed assets in the reserve pool regenerate​.

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Can I earn additional rewards through activities like referrals or community contributions?

Yes! Additional rewards can be earned through:

• Referrals: Block producers can set a share parameter for referrals, meaning they share a portion of their earned POTENTIAL with users they referred​.

• Community Contributions: Users and dApps can submit full NFTs to the reward pool, allowing contributors to earn rewards for supporting the ecosystem​.

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What is the relationship between node performance and the rewards earned?

Currently, node performance does not directly influence rewards, but a reputation system is under development. In the future:

• Validators with better uptime and reliability could receive higher rewards.

• Underperforming nodes may lose eligibility for block production and, therefore, rewards​.

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Where are the fNFTs coming from?

• fNFTs originate from user-created NFTs submitted to the reward pool.

• The blockchain automatically converts full NFTs into fractional NFTs, which are then distributed as rewards for block producers and referrals.

• Communities and dApps can also create NFTs and contribute them to the reward system​.

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What if there are no fNFTs?

• If no fNFTs are available, block producers still receive POTENTIAL as rewards.

• The blockchain ensures that even in the absence of NFTs, POTENTIAL continues to be distributed to incentivize participation​.