Understanding Chia mining economic model in one article

Summary: There is no cap or limit on the total amount of Chia coins that may be generated through farming rewards on the Chia Network blockchain. At the end of the sixth year after launch, all farming rewards generated up to that date will account for 42% of all Chia coins at that time.

Farming rewards will create new Chia after the Chia network block is updated. Our farming reward schedule is directly modeled after Bitcoin's reward schedule. We present these rewards in an ideal situation, but reality is often far from ideal. Due to fluctuations in the space joining the network and the rate at which Timelords increase or decrease, the actual issuance schedule will vary slightly like Bitcoin's issuance schedule has historically. We may add a time adjustment factor based on what we observe in Bitcoin to try to make farming rewards eventually closer to this ideal than Bitcoin. The idealized schedule is as follows.

• 64chia: In the first 3 years after the mainnet launch, 64chia will be generated every 10 minutes.
• 32chia: From the 4th to the 6th year after the mainnet launch, 32chia will be generated every 10 minutes
• 16chia: From the 7th to the 9th year after the mainnet launch, 16chia will be produced every 10 minutes
• 8chia: From the 10th to the 12th year, it will generate every 10 minutes
• 4chia: After the 12th year, it is generated every 10 minutes every year

The Chia Network's blockchain has a release schedule called the Emission Schedule, which adds a significant security advantage over a capped supply. Capped supply blockchains will eventually have rewards coming entirely from transaction fees, which can result in miners having an incentive to overwrite recent history during periods of low transaction fees rather than mining new blocks, especially if fees are significant during the day and approach zero each evening (generally from midnight PT to 4AM PT), which is the pattern that occurs today. Because the emission rate is fixed at 4 Chia every 10 minutes after year 12, the inflation rate as a percentage of supply is forever decreasing. The inflation rate falls below 0.50% in the 25th year after the release. Our goal is to achieve a reasonable balance between transaction fees and block releases.

High enough to strongly incentivize farmers to add them in, but not so high relative to the fixed reward that there is a strong incentive to overwrite history. We also believe that a fixed supply is not necessarily the most important thing to understand inflation, but being able to directly calculate a common expectation of the total supply at any given time can achieve similar fiscal and peace of mind benefits.

XCH release schedule (production reduction plan): halving plan for the first 12 years after the mainnet is launched

Halving plan after the 13th year

This release schedule is influenced by Bitcoin’s release schedule and adjusted for some different mathematical fundamentals of the Chia blockchain, such as an average of 4,608 reward opportunities per day and a faster halving rate.

The following table compares the total amount of Bitcoin mined during the four-year halving period and the amount of Chia mined during the three-year halving period:

Comparison of the actual output results of the two in 11 years, where BTC is an estimated value.