EMC Tokenomics Explained
Real assets, real applications, dual deflation.
Edge Matrix Computing, or EMC, is a blockchain project established in 2022 that offers a high-performance decentralized AI computing power application network to the world. EMC introduces masses of real-world GPU computing power into the Web3 world through smart contracts, constructing a distributed AI DePIN ecosystem, and creating a shining first example of DeAI (Decentralized AI, first proposed by EMC, broadly referring to the new economy of AI + Web3) for the global AI community.
EMC Token Economy Overview
Within the EMC network, the $EMC token serves as a utility token based on computing power, facilitating the trading and usage of computing resources and providing a convenient, streamlined transaction and usage model for computing nodes and end users.
$EMC can be utilized in a variety of Web3-gen application scenarios, such as decentralized AI applications, blockchain games, and blockchain storage, to name a few; in all of these cases, teams and their projects can significantly streamline and reinforce their resource management and trading experiences through $EMC, thereby enhancing the efficiency and performance of said blockchain applications. With each utility transaction made using the token, an equivalent amount of $EMC is destroyed through smart contracts, hence continuously reducing the supply of EMC tokens.
Currently, the $EMC token is deployed on Arbitrum One, enjoying both Ethereum’s vast market with its ~20 billion dollars in Total Value Locked (TVL) and the high-speed, low-gas benefits of the Arbitrum One network, not to mention attracting the millions of Web3 users and investors on the Arbitrum One network.
$EMC’s Role in the Ecosystem
Governance: The central and most basic function of the token is community governance, with $EMC representing the power relations and voting weights within the ecosystem.
Rewards: To maintain a steady supply of computing power and develop the ecosystem.
Transactions: Used for purchasing/consuming computing power and payments in decentralized applications.
Investment: Investing in various ecosystem applications and partners through the foundation, including projects and digital assets.
Staking: Security deposits to ensure the stability of validator nodes, smart routing nodes, and computing nodes.
The Tokenomics behind $EMC
01 Token Details
(1) Token Distribution
The total quantity of $EMC tokens is 1,000,000,000, and this quantity is consistently decreasing under the implementation of a dual deflationary model. In the daily operations of the EMC network, actions such as developer token recharges, RWA transactions or buybacks, and buying and selling AI models on the AI trading market will continuously consume $EMC tokens.
For specifics regarding the destruction process, please refer to ArbitrumScan.
Among the 1,000,000,000：
VC Investors account for 10% of the total supply,
The Founding Developer Team accounts for 15% of the total supply,
Public Sales account for 10% of the total supply,
Airdrops account for 3% of the total supply,
The EMC Foundation / Treasury accounts for 15% of the total supply,
Developer Rewards accounts for 15% of the total supply,
Transaction Rewards account for 20% of the total supply,
Node Rewards account for 10% of the total supply,
And Governance Rewards account for the remaining 2% of the total supply.
(2) Token Trading
For instructions on how to trade $EMC, please refer to:
https://medium.com/@EMCProtocol/purchase-emc-tutorial-76725f590aa5
Uniswap trading address:
https://app.uniswap.org/tokens/arbitrum/0xdfb8be6f8c87f74295a87de951974362cedcfa30
OKX Trading Method: In the OKX Web3 wallet, select the Arbitrum One network, enter the contract address to view and add EMC (exchanging requires ARB-ETH as gas fees):
0xDFB8BE6F8c87f74295A87de951974362CedCFA30
02 Dual Token Model
In addition to the $EMC token, the EMC network also utilizes another stablecoin-esque token called Credits, which act as a voucher for buying and selling items within the EMC marketplace. This allows the EMC network to implement a dual-token, dual-deflationary economic model. When developers need to use computing power, they must purchase Credits with $EMC, with the deposited $EMC being completely burned in the process. This token burning will continuously increase the value of $EMC, attracting more developers and creators to use the network to earn substantial rewards.
03 Dual Deflationary Model
(1) Earnings Deflation
Cluster nodes adopt a leasing protocol for their operations, with the leasing costs usually being paid in fiat or stablecoin. Transaction fees on the RWA platform are converted into $EMC and burned. Eighty percent of the leasing fees are paid directly to the node providers, i.e., the computing power suppliers, while the remaining 20% are directly destroyed. In this process, both node suppliers and leasing clients receive $EMC as transaction rewards for computing power.
(2) Consumption Deflation
EMC Hub offers services like computing power subscriptions, AI applications, and computing sockets. To use these features, users must deposit approved cryptocurrencies (such as USDT, ETH, BTC, etc.) into their consumption account through multi-chain deposits, which are then converted into $EMC in real time. The $EMC in the consumption account cannot be withdrawn and is only destroyed according to the user’s consumption. Edge nodes call on EMC’s computing power nodes through EMC Hub, and EMC provides token rewards to the nodes. In the computing power trading market, AI developers need to deposit $EMC to obtain Credits, with the deposited $EMC being completely burned while purchasing computing resources. Each time an application calls an API request, a certain number of Credits are consumed.
This process maintains the sustainability of computing nodes, enhances the liquidity and utilization of computing resources, and offers developers a flexible way to utilize various resources.
04 Token Release and Rewards
(1) Token Release
The TGE (Token Generation Event) for $EMC (Arbitrum One) tokens began on November 9, 2023. By the end of the latest investment round in January 2024, the portion of EMC tokens sold through fundraising by institutions and global investors reached 10.4%. The token plan for institutional investors and the development team extends over 24–48 months. Ecosystem construction rewards, including governance rewards, account for 47% of the total token pool, serving as financial rewards for ecosystem builders, participants of the EMC network and market (both demand and supply sides). The circulation model of $EMC tokens incorporates built-in deflationary and burning mechanisms.
(2) Token Rewards
EMC provides token rewards for nodes, ecosystem developers, computing power transactions, and staking.
① Node Reward Algorithm
The EMC ecosystem offers workload + staking rewards ($EMC tokens for PoW+PoS) for three types of nodes, with a total reward of 100,000,000 tokens, accounting for 10% of the total $EMC supply.
Computing Power Unit EMC’s smart contracts are based on the allocation of computational units as rewards. The standard proof-of-work algorithm is open source and may be updated from time to time, with each update initiated by the EMC DAO through a voting process and adopted after reaching a majority.
Node Reward Algorithm EMC distributes rewards based on a node’s completed computational tasks relative to the whole network, in conjunction with the staking coefficient. The node reward is calculated as follows:
Node reward = Total node reward * (credit obtained by the current node for completing PoW * staking coefficient) / (credit obtained by all nodes for completing PoW * staking coefficient)
Staking coefficient = Staked amount of the current node / Total staked amount of nodes that have successfully passed PoW in the current round
Validator node rewards: Credit obtained by each validator node for completing one round of PoW = 200
Smart routing node rewards: Credit obtained by each smart router node for completing one round of PoW = 20
Computing power node rewards: When computing power is added to the EMC network by applying for a new node, a broadcast is sent to the entire network. At the same time, the validator nodes send PoW requests to the new node. After reaching consensus, the smart contract writes the status bit into the state machine and adds the node ID of the computing power node to the whitelist, making the new node effective.
Credit obtained by each computing power node for completing one round of PoW = 10
② Ecosystem Developer Rewards
The EMC ecosystem offers developers token rewards totaling 150,000,000 $EMC, accounting for 15% of total token supply.
Developers can request rewards from the EMC DAO, and the content and token amounts in their applications will be voted by EMC community. If the voting turnout exceeds 50%, the developer will receive the reward.
The EMC DAO plans to reward users of operational ecosystem projects based on daily active users (DAU) or related metrics, with specific rules subject to community voting and smart contract execution upon a majority vote.
③ Computing Power Trading Rewards
Both parties in the computing power market can receive computing power trading rewards froma pool of a total of 200,000,000 tokens accounting for 20% of the total $EMC supply.
EMC charges a 20% transaction fee on computing power transactions and then awards computing power trading rewards based on a percentage P of the transaction fee, with P=100% in the initial period (the remaining portion of the transaction fee after rewards are deducted is converted into EMC and destroyed). Details are available in the official EMC whitepaper.
④ Staking Rewards
Token holders participate in ecosystem governance and receive staking rewards by staking $EMC in smart contracts.
Governance primarily involves proposing and voting, with voting weight automatically calculated based on the amount and duration of staked tokens. The initial total reward is 20,000,000, accounting for 2% of the total $EMC supply, with 5% of EMC treasury income allocated to the reward pool to reward long-term staking $EMC token holders.
EMC Value Vision
As the EMC ecosystem rapidly develops, the blueprint for EMC’s AI DePIN (Decentralized Participatory Infrastructure for AI) has become clearer and clearer. EMC combines distributed GPU computing power with Web3 to create an AI ecosystem on the blockchain computing power network, facilitating all sorts of interactions and helping AI developers, creators, and consumers to better experience the Web3 economy. The concept of “DeAI” (Decentralized AI) proposed by EMC has also gained consensus among an increasing number of users. Driven by the demand for AI applications, EMC aims to establish an integrated AI application ecosystem, with the goal of becoming the decentralized “OpenAI”.
Recently, EMC announced two rounds of significant funding.
In January, EMC announced the completion of its first round of strategic financing worth millions of dollars. Investors included Swiss Bochsler Group, Future3 Campus, 1783 Labs, Frontier Research, DMC, VOFO Corp, Exabits.ai, Hashmeta, CEEX Labs, and BlueSea, among other institutions and family offices.
In February, EMC announced another successful round of million-dollar global community strategic financing. This round was led by Faculty Group and Flow Capital, targeting the global Web3 community/DAOs, AI developer communities, early contributors, VCs, and advisors.
Through strategic sales, EMC has established a broad and robust community consensus globally, mobilizing not just participants from the Web3 space but also uniting the vision of AI application developers and computing network infrastructure builders. Furthermore, as the ecosystem continues to mature, an increasing number of KOLs have started to pay attention to and support EMC, showing a keen interest in EMC’s technology and value vision.
For the year of 2024, EMC has its sights set on nothing short of exponential growth. Fundamentally changing traditional business logic and genuinely integrating the Web2 economy into the Web3 world, the EMC network allows users to truly experience low-cost, zero-risk entrepreneurship, enabling everyone to participate equally in the construction of AI.
