# Incentive

# Deflationary Economic Model

Zarb is a deflationary blockchain, same as in the case of Bitcoin. The total number of coins in Zarb is 21 million and it is set at genesis time. Zarb does not have any pre-minted token or privileged account.

# Flat Reward

The incentive may help encourage nodes to stay honest[1]. To have a better understanding about the incentive model in Zarb, let's do a comparison with the Bitcoin incentive and reward distribution model. We will use this comparison to show the difference. We love Bitcoin and Bitcoin is the king.

Zarb Bitcoin
Consensus engine is Proof of Stake Consensus engine is Proof of Work
Exactly every 10 seconds one block is minted Around every 10 minutes one block is mined
Total supply is 21,000,000 coin Total supply is 21,000,000 coin
Always one coin per block Initial block reward is 50 coin
No halving Halving happens every 4 years

The way Bitcoin distributes the tokens is a good solution for Proof-of-Work blockchain. Early contributors in Bitcoin collect most of the tokens. This scheme in Proof-of-Stake blockchain will damage the network by powering early contributors. Simply because the validators are weighed by their stake. More stake, more power.

Rewards in Bitcoin

Rewards in Zarb

In Zarb, the token distribution is flat. It means the reward for each block is fixed and does not change over time. There is no halving in Zarb. The flat reward is a part of the consensus parameters and, for the main net, it sets one coin per block.

Token distribution in Bitcoin

Token distribution in Zarb

# Treasury Account

A Treasury account is a special account and is defined at the genesis time. The treasury account at the genesis time holds the total coins (21 million).

# Reward Transaction

The first transaction in each block is the reward transaction.

  1. Bitcoin: A Peer-to-Peer Electronic Cash System (opens new window) ↩ī¸Ž