teleo-codex/domains/internet-finance/dynamic-license-fees-create-price-responsive-supply-throttle-in-token-mining-systems.md

type	domain	description	confidence	source	created
claim	internet-finance	COAL's c(y) license function automatically scales mining tool creation costs with COAL/ORE price ratio, creating self-regulating supply without governance intervention	experimental	futard.io, Meta-PoW: The ORE Treasury Protocol proposal, 2025-11-07	2026-03-11

Dynamic license fees create price-responsive supply throttle in token mining systems

The Meta-PoW license mechanism implements a cubic price function c(y) = c0 * (y / y_ref)^3 where y = P_ORE / P_COAL, creating automatic supply adjustment without requiring governance votes or manual intervention. When COAL strengthens relative to ORE (y decreases), the license cost falls, making pickaxe crafting economically viable for more participants. This increases mining activity, INGOT demand, and ORE treasury inflow. When COAL weakens (y increases), license costs rise, throttling new tool creation and reducing system load.

The cubic exponent (p = 3) creates strong sensitivity to price changes while the clamp bounds (c_min = 1, c_max = 300) prevent extreme values. With baseline c0 = 200 COAL and y_ref = 50, the function spans a 300x range across realistic price scenarios. The license is paid in COAL and burned, not sent to the treasury, making it a pure control parameter rather than a revenue mechanism.

This differs from fixed emission schedules or governance-adjusted difficulty because the throttle responds continuously to market signals rather than predetermined curves or discretionary decisions. The EMA-smoothed TWAP for y prevents manipulation through short-term price spikes.

Evidence

• License function: c(y) = c0 * (y / y_ref)^p, clamped between c_min and c_max
• Suggested defaults: c0 = 200 COAL, y_ref = 50, p = 3, c_min = 1, c_max = 300
• Behavior: "When COAL is strong relative to ORE (y low): c(y) decreases, More picks are economically viable, More smelting and more ORE flows into the treasury"
• Control vs revenue: "The license is paid in COAL only. That COAL is burned, not sent to the treasury. It is a control parameter, not a revenue stream."
• Price source: "y = P_ORE / P_COAL using an EMA-smoothed TWAP"

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Relevant Notes:

• dynamic performance-based token minting replaces fixed emission schedules by tying new token creation to measurable outcomes creating algorithmic meritocracy in token distribution
• optimal governance requires mixing mechanisms because different decisions have different manipulation risk profiles

Topics:

• domains/internet-finance/_map
• core/mechanisms/_map