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Staking Hub: Coda AMA (Round 2)

O(1) Labs, the team behind Coda, bills Coda as the “world’s lightest blockchain”. Current cryptocurrencies like Bitcoin and Ethereum store massive amounts of data on their blockchains, and will only continue to increase in size. Coda however, claims that their blockchain will always stay the same size (about 20 kilobytes), no matter the usage. This will allow the blockchain to be downloadable by anyone who has basic storage and internet access. On April 30th, the O(1) Labs team joined us to answer our Coda questions.

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Quick Takes

  • Every Coda user is a full node
  • Lightweight smart contracts will be supported at launch
  • Inflation rate is adjusted on a quarterly basis from 12% to 7% over 5 years
  • Block rewards adjusted based on staking participation
  • SNARK production and marketplace expected to not be correlated with block rewards

Easy Access

Coda is a small fixed sized blockchain, which essentially means anyone who has basic compute power can become a full node on the network, thus furthering decentralization. Ease of access is important to Coda and the O(1) Labs team highlights it as one of the ways they are attracting developers to build on Coda. Many current blockchains require developers to learn all sorts of complicated infrastructure in order to host full nodes and expose the chain data to its users. On Coda, every user is a full node, which means initial setup time is dramatically reduced.

Use Cases

O(1) Labs see payments and financial services as the main first use cases for Coda. Lightweight smart contracts, like predicate-based computations, will be available at launch, and more advanced smart contracts will be available shortly after, thereby paving the way for DeFi applications. That being said, payments are the main focus for O(1) Labs and their token design is reflective of that.

“There’s no max supply of Coda like Bitcoin. It’s an inflationary token. We believe this positions it better to be actual money. Without going into Austrian economics debate, none of us are spending Bitcoin, because it’s more logical to hold on to digital gold.”

– Emre Tekisalp

Network Inflation

The initial inflation rate on Coda is set at a flat 12% during the first year, regardless of participation. That number will drop to 7% over the next 5 years on a quarterly basis. The initial inflation rate was set high to incentivize Coda token holders to stake in order to ensure security and robustness of the chain. Overtime, as the Coda ecosystem diversifies, O(1) Labs believes that the inflation can drop while still ensuring security of the network. Adjustments to the inflation rate can be decided upon through an off-chain governance process.

Block Rewards

Because Coda plans to have a fixed inflation rate, block rewards will adjust based on staking participation in order to target its fixed inflation rate. For example, if 50% of Coda tokens are staked, block rewards will double. This will encourage more individuals to stake at lower participation rates.

The “Snarketplace”

SNARKs are required for every transaction a Block Producer wants to add to a block. Block Producers can either produce SNARKs themselves or purchase SNARKs from Snarkers in a market known as the Snarketplace. The O(1) Labs team expects that certain participants will specialize in SNARK production, which will lead to these Snarkers producing SNARKs more efficiently than Block Producers.

The Snarketplace is essentially a commodity market. The dynamics of the Snarketplace is assumed to result in a race to the bottom to find the lowest cost of producing SNARKs. Therefore, it is expected that the price of a Snark will not be determined by current block rewards. Currently, the most expensive SNARK proof on Coda costs around a cent to produce.

Genesis Program

Coda’s Genesis Program will grant tokens to 1000 members who have applied to help secure the network, create tooling, and grow the community around Coda. Figment Networks and 39 others have already been accepted and Coda plans on onboarding 200 more members after their current testnet ends.

Special Thanks

Special thanks to Emre and Brandon for spending an hour with Staking Hub to answer all of our questions!

Thank you Gavin for co-hosting and thanks to our Staking Hub community for all of your wonderful questions.

Feel free to join our Staking Hub Telegram group if you haven’t already.

Check out our previous Staking Hub: Coda AMA for more insight from the O(1) Labs team.

Originally published at



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Clayton Menzel

Clayton Menzel

Marketing & Communications Manager @ Figment