13. Tokenomics — $DNR (Dinar)

The native currency of the Kortana network is the Dinar ($DNR). It uses 18 decimal places and is required for paying gas fees, staking, and governance.

13.1 Emission Model (Disinflationary)

DNR adopts a disinflationary emission model. The burn mechanism and on-chain governance controls are designed to maintain long-term supply stability.

• Initial Circulating Supply: 10,000,000,000 (10B) DNR
• Emission Model: Disinflationary — new DNR is issued per epoch as validator and delegator rewards. The emission rate decreases as the network matures.
• Burn Mechanism: 50% of every base transaction fee is permanently burned. Net supply change is a function of network activity.
• Net Inflation Formula: Net Emission = Block Rewards - (Base Fee × 0.5) At sufficient network throughput, burn can meet or exceed emission, making DNR deflationary in practice.
• Mint Authority: Protocol-controlled. Emission parameters are adjustable via on-chain governance with a mandatory timelock. No unilateral team minting is permitted.

13.2 Deflationary Mechanics

The protocol actively removes DNR from circulation through three mechanisms:

1. Base Fee Burn (50%): Half of all base transaction fees are permanently burned, removing tokens from circulation. The other 50% goes to the block proposer as direct revenue.
2. Emission Halving (-10%/yr): Block rewards decrease by 10% every 4,320,000 blocks (~1 year). Year 1 max emission: ~63M DNR. By year 10, block rewards fall below 2 DNR.
3. Slashing Burns (1–100%): Slashed validator stake is burned, not redistributed. Byzantine attacks result in 100% stake destruction, providing an additional deflationary mechanism.

13.3 Allocation & Distribution

The initial Genesis supply of DNR is allocated as follows:

• Ecosystem and Community: 40% (Pays validator self-stake and community incentives)
• Treasury: 25%
• Foundation Reserve: 20%
• Core Development: 15%

13.4 Supply Conservation Invariant

The Kortana node strictly enforces a mathematical invariant upon startup and after every block: balances + bonded + unbonding + pending + treasury + burned == total_minted If this invariant fails due to a bug in fee collection or reward distribution, the node will halt rather than process a corrupted supply.

13.5 Vesting

Vesting is managed by contracts/KortanaVesting.sol.

• Design: Grants unlock linearly after a cliff.
• Pull, not push: Beneficiaries must claim their unlocked tokens.
• Not Revocable: Eliminates the risk of a compromised central key clawing back vested funds.
• Note: Vesting is deployed on day one, so initial Genesis allocations are directed to controlled multisigs that immediately deploy the vesting contracts.

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