Node Token Distributions
Last updated
Last updated
The native token of the network, $OSMI, is distributed daily to node owners in a transparent and fair manner. Before being distributed, the following steps are performed:
Node Verification
Distribution Calculation
Vesting
Token Distribution
Before the distribution, each node is verified to ensure it meets the necessary criteria to receive $OSMI tokens. These criteria include being an active participant in the network, performing tasks such as inference, or contributing to the network's ecosystem (e.g. file storage). A node with a running uptime of at least 18 hours is verified to receive the minimum distribution (we will be lenient on this requirement for the first few days of the initial sale). Nodes performing direct AI tasks, such as inferencing, will receive a larger portion of the distribution.
The daily distribution of $OSMI tokens is calculated based on the number of verified nodes, the total daily allocation of tokens, and a set distribution ratio. The total number of tokens to be distributed per day and the distribution ratio can be seen in the Tokenomics section. Node distributions group rewards according to node type. For example, memory nodes split the node rewards amongst all other memory nodes, whereas LLM nodes distribute their portion among other LLM nodes. Currently, all nodes participate in the daily distribution as one node type, but in the future there will be other nodes introduced and they will also split rewards. This ensures a healthy ecosystem with node owners will be able to switch and provide resources to balance out the network.
Tokens undergo a vesting period prior to being released and minted. This vesting mechanism helps deter abuse and promotes a healthy network. Tokens transition through two states: Held and Released. Tokens in the Held state are in a vested condition and cannot be redeemed. Released tokens, on the other hand, are no longer part of the Held pool and can be minted and transferred.
Tokens are held, or vested, for a span of 90 days. During this time, they accumulate, but remain inaccessible for any interaction. For instance, when a node owner operates their node for 100 days, 90 days of distributed tokens will be in a held state, while 10 days of tokens will be in a released state, released one at a time (i.e. day 91, tokens from day 1 distribution move to released state, day 92, tokens from day 2 distribution move to released state, etc.). Once in released state tokens are ready for minting to the user's preferred blockchain (Ethereum or GalaChain). It is crucial to note that tokens are only released on a daily basis from their vesting status.
If at anytime, a Node NFT is transferred to another wallet, the vesting period resets and all held tokens are burned. Released tokens will be unaffected and can be released to the original wallet.
In the near future, node owners will have the option to burn held tokens to accelerate their vesting schedule. We will use community feedback to help determine best practices; stay tuned.
According to the above vesting schedule, once tokens are released from being held, a node owner has the option of minting their tokens (potentially incurring fees depending on which blockchain they are minted on). Once minted these tokens behave as any crypto asset free from restriction.
