Token Reduction

The Utility network employs a token reduction mechanism similar to Bitcoin [3] to control the total number of UNC and maintain their scarcity and value. Specifically, every 2 years (or some predetermined block height), the mining reward of the Utility network will be halved. Mathematically, this can be expressed as:

q = q00.5 2 (23)

where t is the elapsed time (in years), q is the re- ward at moment t, and q0 is the initial reward, which is the mining reward per block when the network is first started.

The token reduction mechanism keeps the to- tal number of UNC limited, thus ensuring their long-term scarcity and value. Over time, mining rewards continue to diminish and the number of newly generated tokens gradually decreases. This design helps offset the effects of inflation and keeps the value of tokens growing steadily.

The token reduction mechanism of the Utility network complements the supply and demand in the market. As the scarcity of UNC increases,the demand for them in the market is likely to rise, thus driving up their value. In addition, token re- duction provides an incentive for participants to join at the beginning of the network for higher min- ing rewards, thus contributing to the growth and development of the network.

As mentioned above, the token reduction mechanism of the Utility network maintains the scarcity and value of UNC by limiting the total number of tokens. This design helps offset the effects of inflation, maintains a steady increase in token value, and motivates more participants to join the network.