The overall supply of tokens is deflationary. HyperCube's token economic structure is designed according to the standards of deflation and security maintenance, and the purpose is to maintain the most secure economic structure of the network system while maintaining a reasonable supply of tokens.

The HyperCube crypto-economic system is intended to promote a healthy, long-term, self-sustaining economy by aligning participant incentives with network security and decentralization. Validation-clients are the primary participants in this economy. Their network contributions, state validation, and the necessary incentive mechanisms are discussed further below.

Protocol-based rewards and transaction fees are the two main channels of participant remittances. Protocol-based rewards are created by issuing inflationary issuances according to a protocol-defined inflation schedule. The total protocol-based reward delivered to validation clients will be comprised of these rewards, with the remainder sourced from transaction fees. Protocol-based rewards, deployed on a predefined issuance schedule, are likely to drive the majority of participant incentives to participate in the network in the network's early days.

These protocol-based rewards are calculated and distributed per epoch across the active delegated stake and miner set (per miner commission). The annual inflation rate is determined by a predetermined disinflationary schedule, as discussed further below. This provides supply predictability to the network, which supports long-term economic stability and security.

Transaction fees are participant-to-participant transfers that are attached to network interactions as motivation and compensation for the inclusion and execution of a proposed transaction. A mechanism for long-term economic stability and forking protection is also discussed below, involving the partial burning of each transaction fee.

First, a high-level overview of the inflation design is provided. This section begins by defining and clarifying terminology commonly used in discussions of inflation and its constituents. Then, we outline HyperCube's proposed Inflation Schedule, which includes the specific parameters that uniquely parameterize the protocol-driven inflationary issuance over time. Following that is a brief discussion of Adjusted Staking Yield and how token dilution may affect staking behavior.

An overview of Transaction Fees on HyperCube is followed by a discussion of Storage Rent Economics, in which we describe the implementation of storage rent to account for the externality costs of maintaining the active state of the ledger.