[Deflationary Asset Design] The newly constructed DEP Protocol economic zone is designed as a "deflationary asset" that structurally increases scarcity in complete alignment with the real demand of the expanding data economy. As the ecosystem grows, the number of DEP in circulation will physically decrease, building a strong economic foundation where the scarcity value per token theoretically rises.
5.1 DEP Chain and Token Structure
[Hybrid Structure] The DEP token economy evolves into a hybrid structure that fuses the existing asset value on Ethereum with the high utility of the newly built Avalanche L1 chain.
1. DEP Chain (Avalanche L1)
- Asset Migration: Approximately 30 billion DEP tokens have already been issued as ERC20 tokens on Ethereum and are widely circulated in the market. We are launching the "DEP Chain," a proprietary economic zone that utilizes these assets as its native token.
- Avalanche L1 (ACP-77 Compliant): The DEP Chain is built adopting "Avalanche L1" (formerly Subnet), the latest technology stack from Avalanche. Anticipating support for the latest ACP-77 architecture, we realize an autonomous (Sovereign) chain operation that allows resources to be concentrated on maintaining the security and operation of the DEP Chain, without imposing heavy AVAX staking or verification duties on the Avalanche Mainnet (P-Chain) for validators.
- EVM & EIP-1559: Being Ethereum Virtual Machine (EVM) compatible, existing Ethereum development tools and assets can be used as they are. The fee model adopts a mechanism following EIP-1559, ensuring network congestion relief and fee predictability, while incorporating a deflationary mechanism where a portion of the Gas fees is automatically burned as the Base Fee.
2. DEP Protocol Ecosystem
The "DEP Protocol" ecosystem, a data verification middleware, operates centered around the DEP Chain.
Service Providers: Providers such as AI development companies can easily implement decentralized workloads by utilizing the module groups provided by the protocol.
Module Examples: RLHF (AI training data verification), Ad Fraud Prevention, DePIN (Physical Infrastructure), Data Cleaning, etc.
The Role of Validators: The foundation of this ecosystem is the validator. Validators generate blocks for the L1 chain (maintain security) while simultaneously operating the above modules using the same security foundation (delegated DEP stake) to provide computational resources.
3. Bridge and "Bridge Staking"
Simultaneously with the mainnet launch, a bridge function will be provided to transfer ERC20 DEP on Ethereum to the DEP Chain. Bridged DEP is minted as a native token on the DEP Chain.
UX Maximization: To maximize User Experience (UX), we are implementing a "Bridge Staking" function. This allows users moving tokens from Ethereum to the DEP Chain to not only bridge but also "complete staking on L1 simultaneously with the bridge." This grants users the right to earn rewards in a one-stop shop without complex operations.
4. Reward Distribution and Roles
- To maintain a balance between security and incentives, operations follow these rules:
- Decentralized Security: Unless otherwise specified by the user, staked tokens are evenly distributed (delegated) to approximately 100 operating validator nodes. This prevents the concentration of power in specific nodes and levels out slashing risks. (It is also possible to specify a validator to stake with, or to become a validator and self-stake.)
- Roles and Rewards: The ecosystem consists of a division of roles between "Token Holders (Delegators)" who provide security (assets) and "Validators" who provide physical computational resources.
Role | Provides | Rights to Rewards |
Validator | Physical Server (Node), Operational Responsibility | • 50% of Module Usage Rewards (Exclusive)
• 5% - 10% of Gas Fee Rewards |
Delegator (Token Holder) | DEP Tokens (Security Collateral) | • 90% - 95% of Gas Fee Rewards |
Token holders contribute to chain security by depositing DEP and receive the majority of Gas fees in return. Meanwhile, validators have the incentive to earn module income exclusively, committing them to maintain high-quality infrastructure.
5.2 Demand for DEP from the Real Economy
[Real Demand Definition] "Real demand" in the DEP Protocol refers not to speculative token trading, but to protocol usage fees and Gas fees generated by actual business activities. Ecosystem revenue does not depend on token inflation (new issuance) but is backed by "foreign currency" such as data purchase payments from AI companies.
[Economic Flow] Economic activity is born when external "Users (Payers)" like advertisers and AI companies use services provided by business developers (participants), such as ad fraud prevention or AI training data sales. Consequently, business developers pay protocol usage fees and Gas fees in DEP to utilize the module groups on the DEP Chain.
This "Protocol Fee and Gas Fee paid by real economic activity" is the source that supports the intrinsic value of the DEP token. The collected fees are designed to be distributed and processed as follows to maintain and expand the ecosystem.
【Protocol Revenue Distribution Model】
Protocol Usage Fees:
Node Rewards: 50%
Ecosystem: 25%
Burn: 25%
Gas Fees (EIP-1559):
Base Fee: 100% Burned
Priority Fee: Distributed to Stakers and Validators (Ratio set by Validators).
5.3 Dual-Burn Strategy
[Strategy Overview] To achieve the ambitious goal of halving the total supply (from 30 billion to 15 billion), the DEP Protocol applies a "Dual-Burn Strategy" combining two burning engines with different properties to protocol usage fees. By running two engines with distinct roles—"Real-Demand Linkage" and "Price Stabilization"—in parallel, we narrow the supply regardless of market conditions (bull or bear markets) and mathematically guarantee the sustainable improvement of token value.
1. Real-Time Burn
- Mechanism Detail: This engine is an automated burning system triggered instantly every time economic activity occurs on the DEP Protocol. Specifically, 20% of the protocol fee when using DEP Protocol modules is sent to a burn address by a smart contract and permanently extinguished, never to return to the market. (Note: For Gas fees, the Base Fee is burned in compliance with EIP-1559).
- Fiat-Pegged Fees: Crucially, protocol usage fees and Gas fees are designed not to rise due to soaring DEP market prices. The base amounts for fees are fixed in fiat currency (e.g., USD). At the time of actual payment, the oracle rate is referenced, and DEP equivalent to that moment's fiat price is collected.
- Example: If the fee is "$1.00 per transaction":
- When DEP = $0.01: Pay 100 DEP (of which 20 DEP is burned).
- When DEP spikes to $1.00: Pay 1 DEP (of which 0.2 DEP is burned).
- This mechanism ensures that the real cost burden (dollar basis) for companies and users remains constant regardless of how high the DEP price rises, preventing the hurdle for service usage from increasing.
- Features and Economic Effect: The greatest feature is that the platform's practical value (utility) and token scarcity are completely linked. As the network becomes active and data trading increases, the burn amount accelerates. This creates a direct correlation where "Ecosystem Growth = DEP Supply Decrease," serving as a powerful engine that exerts permanent deflationary pressure as long as the network operates.
2. Auto Burn
- Mechanism Detail: This engine burns DEP stored in the treasury (collected as 5% of protocol fees) on a quarterly basis, based on a pre-determined program.