The total amount of Spacemesh coins that will ever exist is 2.4 billion. 93.75% of the total (2.25 billion) is incrementally minted as block subsidy, while 6.25% (0.15 billion) is reserved for team rewards and initially inaccessible. The block subsidy is issued in each block, according to the subsidy issuance schedule. Team rewards are initially locked in special vesting vaults. They gradually get released for withdrawal according to the vesting schedule, starting a year post-genesis.
At a very high level, subsidy issuance happens following an exponential decay function over close to 2000 years. Team rewards start vesting a year after genesis and finish vesting 3 years later.
Edit 30/01/2024: Due to community consensus, we have now smoothed out the vesting “cliff”. You can read our full reasoning for doing so in this blog post.
First 5 years and first 500 years of issuance
In the 277th year post-genesis the layer subsidy drops below 1 SMH, so the total circulating supply doesn’t change much after the period shown in this chart, although it does formally continue into the 1893th year before stopping entirely.
Subsidy Issuance
Smeshers that participate in block production receive block rewards. Those rewards have two sources: newly minted coins (referred to as block subsidy) and fees collected from transactions included in the block.
The amount of new coins generated in every block gradually decreases following an exponential decay function, until it eventually reaches zero. After that point smeshers will only receive the fees collected in each block as their reward.
The total accumulated subsidy amount at each layer is governed by the following formula:
Definitions:
To calculate the amount of new coins in a given layer, we calculate the accumulated subsidy for the current layer and the previous layer and subtract the latter from the former.
Vesting Schedule
Rewards allocated to members of the development team, the Spacemesh company and investors that helped fund the development of the protocol and implementation are minted and distributed to their beneficiaries at genesis in a special kind of vault account, but cannot be moved until they vest.
During the first year after genesis none of the reward funds is accessible. Only after a year passes, 25% of reward coins become available to withdraw from the vaults. From this point on rewards vest layer-by-layer linearly, such that vesting completes exactly 4 years after genesis.
This scheme was intentionally devised to ensure that the vested team rewards, at any given time, remain lower than the accumulated block subsidy.
Analysis
The following table shows when each decile of the total SMH supply will be in circulation.
Further Reading
A simulation of this schedule in Go can be found in the following public Github repository:
https://github.com/spacemeshos/economics
The full specification and breakdown of the reasoning and math involved can be found in this Github issue:
https://github.com/spacemeshos/pm/issues/151
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