Economics Deep-Dive

Complete breakdown of Ghost's economic model — share formulas, payout math, treasury mechanics, and the path to ossification.

Overview

Ghost economics are designed around three principles:

  1. Miners first — 99% of subsidy + 100% of fees go to miners
  2. Sustainable node incentives — Behavior-based rewards, not speculation
  3. Path to zero governance — Treasury decays to 0%, system ossifies
No New Token
Ghost introduces no new token. All rewards come from Bitcoin block subsidies and transaction fees. There's no inflation, no pre-mine, no ICO.

Pool Fee Structure

Ghost Pool charges a fixed 1% fee on the block subsidy only. Transaction fees are never touched.

Fee Distribution

pool_fee = block_subsidy × 0.01
Currently: 3.125 BTC × 0.01 = 0.03125 BTC per block

The 1% fee is split between Treasury and Node Reward Pool:

Phase Treasury Node Reward Pool
Before 21 BTC threshold 0.5% 0.5%
Year 1 of decay 0.4% 0.6%
Year 2 of decay 0.3% 0.7%
Year 3 of decay 0.2% 0.8%
Year 4 of decay 0.1% 0.9%
Year 5+ (ossified) 0% 1.0%

Miner Payouts

Subsidy Distribution

Miners receive 99% of the block subsidy, distributed by hashrate contribution:

miner_subsidy = (miner_shares / total_round_shares) × (block_subsidy × 0.99)
Where miner_shares = shares submitted by this miner this round

Transaction Fees

The miner whose share found the block receives 100% of transaction fees:

winning_miner_total = miner_subsidy + block_tx_fees
Only the block-finding miner gets block_tx_fees
Why TX fees to winning miner?
The node that builds the template chooses which transactions to include. Giving them 100% of fees incentivizes building high-fee templates. This is unlike traditional pools that split fees across all miners.

Node Share System

Nodes earn 0-15 shares based on behavior. Shares determine your portion of the Node Reward Pool. The Gatekeeper prerequisite (95% uptime over 7 days) must be met before any shares are awarded.

Share Types

Share Type Points Requirement
Archive Mode +5 Store full blockchain history
Ghost Pay +4 Process Ghost Pay settlements
Public Mining +3 Accept public Stratum connections
Bitcoin Pure +2 Run Bitcoin Core, maintain UTXO set
Elder Status +1 One of first 101 nodes
Maximum 15

Node Reward Formula

node_reward = (your_shares / total_network_shares) × node_reward_pool
Where node_reward_pool = block_subsidy × (0.005 to 0.01)

Example Calculation

If you have 12 shares and the network has 1000 total shares:

node_reward = (12 / 1000) × 0.015625 BTC = 0.0001875 BTC
Per block, assuming 0.5% pool fee allocation to nodes

Treasury & Decay

Treasury Threshold

The Treasury accumulates until it reaches 21 BTC. This is a hard cap — once reached, the decay begins automatically.

treasury_allocation = block_subsidy × 0.005 (until 21 BTC reached)
At current subsidy: 0.015625 BTC per block → ~134 blocks/day → ~42 days to 1 BTC

5-Year Decay

Once 21 BTC is reached, Treasury allocation decays over 5 years:

Y1: 0.4%
Y2: 0.3%
Y3: 0.2%
Y4: 0.1%
Y5+: 0%
Treasury allocation
Ossified (no treasury)

Treasury Usage

Treasury funds can only be used for:

  • Development and engineering
  • Security audits
  • Infrastructure costs
  • Legal and operational requirements

There is no governance voting or political mechanism. Treasury usage is pre-defined and transparent.

Ossification

After the 5-year decay completes, Ghost enters its final state:

Parameter Final Value
Pool Fee 1% (unchanged)
Treasury Allocation 0%
Node Reward Pool 1%
Governance Dissolved

In the ossified state:

  • No more development funding
  • No more governance decisions
  • No more changes to economic parameters
  • Ghost becomes permanent, neutral infrastructure
Why Ossification?
Governance is a liability. By designing Ghost to become governance-free, we eliminate the risk of capture, politics, and drift from original principles. The system simply runs, forever, as designed.

Worked Examples

Example 1: Block Found

A block is found with 3.125 BTC subsidy and 0.5 BTC in fees. The round had 10,000 miner shares.

Pool fee: 3.125 × 0.01 = 0.03125 BTC Treasury: 0.03125 × 0.5 = 0.015625 BTC Node Reward Pool: 0.03125 × 0.5 = 0.015625 BTC Miner Pool: 3.125 × 0.99 = 3.09375 BTC Miner A (1000 shares, block finder): Subsidy: (1000/10000) × 3.09375 = 0.309375 BTC TX Fees: 0.5 BTC Total: 0.809375 BTC Miner B (500 shares): Subsidy: (500/10000) × 3.09375 = 0.1546875 BTC TX Fees: 0 (not block finder) Total: 0.1546875 BTC

Example 2: Node Rewards

Network has 100 nodes with total 1200 shares. Your node has 14 shares.

Node Reward Pool: 0.015625 BTC (per block) Your reward: (14/1200) × 0.015625 = 0.000182 BTC per block At 144 blocks/day: Daily: 0.000182 × 144 = 0.0262 BTC Monthly: 0.0262 × 30 = 0.786 BTC

Example 3: Elder Advantage

Comparing Elder vs non-Elder node with same configuration (14 shares vs 15 shares):

Network: 100 nodes, 1400 total shares Non-Elder (14 shares): (14/1400) × 0.015625 = 0.00015625 BTC/block Elder (15 shares): (15/1400) × 0.015625 = 0.00016741 BTC/block Elder advantage: ~7.1% more per block