Everything you ever wanted to know

How XTM supply, mining rewards, and the Turbine burn model work together to power the Tari network.

Two layers, one fair-launch protocol

The Tari network has two layers: Layer 1, the Tari base layer, and Layer 2 (the Ootle network). Layer 1 is secured by proof of work. Miners are rewarded with Minotari tokens (XTM). Layer 2 is a Byzantine fault-tolerant network fueled by the Tari token (XTR).

There will be a total supply of 21 billion XTM, emitted gradually using an exponential decay function over approximately 27.8 years. Once annual emissions decline to 1% of total supply, a perpetual 1% tail emission continues, ensuring ongoing miner compensation and network security. Of this total supply, 6.3 billion XTM (30%) are pre-mined, subject to significant lockups and vesting schedules. The pre-mined tokens will support protocol infrastructure, community incentives, grants, and long-term alignment with contributors. After the pre-mine distribution, all newly minted tokens (100%) will go exclusively to miners who secure the network.

There is a deep relationship between XTM and XTR tokens. The only way to create XTR is to burn XTM on Layer 1. A transaction fee-oriented burn mechanism on the Ootle network will help ensure overall token supply equilibrium. There is much to cover, so let’s start with the Tari Layer 1 proof of work model and XTM.

Proof of work

Distribution as fair as it gets

Once considered the gold standard for securing blockchains, proof of work originated with Satoshi Nakamoto’s implementation for Bitcoin. Recently, it’s fallen out of favour among proof-of-stake consensus mechanisms. We strongly believe that in the coming months, there will be a renewed appreciation for Nakamoto Consensus. A blockchain consensus mechanism combining proof of work and the longest chain rule to achieve network agreement on the blockchain state. Anyone and everyone will be able to mine Minotari on Day 1, creating a world where everyone has a voice and an opportunity to participate in the network and shape its future. This accessibility brings a fair distribution that hasn’t been absent in recent projects. You don’t need to be an early investor or an airdrop farmer to get XTM; simply contributing raw hash power to the network is enough.

Tari miners receive XTM for every block they mine, with block rewards declining on a block-by-block basis. In the first 12 years after the mainnet launch, the Tari protocol employs a tail emission model. After 12 years, the protocol rewards miners via a tail emission to ensure they receive compensation forever for securing the network. The tail emission increases the XTM emitted by 1% a year. Tari miners receive 100% of block rewards and Layer 1 transaction fees.

Unlike Bitcoin, which operates on a 4-year halving schedule, the Tari block rewards decrease steadily over time, block-by-block, through an exponential decay function, halving approximately every three years.

Network rewards are split 50/50, with half of the Tari block reward going towards merge mining performed with the RandomX hashing algorithm and 50% of the block rewards going to Tari standalone miners using the SHA3x hashing algorithm. RandomX is a proof of work (PoW) algorithm designed to be ASIC-resistant by optimizing for general-purpose CPUs, ensuring fairer, more accessible, and more decentralized mining. The merge-mining aspect of Tari will enable existing RandomX miners to increase their revenue and keep them successfully mining both the RandomX chain and Tari for the foreseeable future. The Tari protocol bakes this 50/50 distribution into the consensus rules.

Burn baby burn

The Turbine Model

All dApps (tapp) activity will occur on the Tari Layer 2 (the Ootle), including DeFi, NFTs, SocialFi, GameFi, stablecoins, streaming payments, and more. Tari contributors have designed an elegant relationship between the Layer 1 token (XTM) and the Layer 2 token (XTR) to offset supply inflation and reward the network as they progress between them. Tari contributors achieve the Turbine Model this way.

XTM to XTR

In the Turbine Model, the only way to create XTR tokens is to burn XTM tokens on the Layer 1 and redeem the 1:1 on the Ootle network. As a result, there is a one-way relationship between the two tokens. On the Ootle, a portion of the transaction fee is paid in XTR to validators and users, which helps maintain a soft 1:1 peg between Minotari (XTM) and Tari (XTR) using complicated peg-out mechanisms like drive chains or federated pegs.

The Throttle

This token-burning mechanism creates a powerful economic model where Tari miners can confidently secure the network forever, and at scale, the overall Tari token economy achieves circulating supply equilibrium. The Throttle actively controls the burn rate for XTR associated with every transaction on the Ootle. It is an algorithm run via consensus by validator nodes that periodically adjusts the burn rate to maintain the stability of the Tari ecosystem, so it has three priorities in decreasing order of importance: maintain the XTM: XTR peg, maintain a stable supply of XTR and XTM, and control total supply of 21 billion tokens.

The Turbine Model enables Tari to maintain a soft 1:1 peg between Minotari (XTM) and Tari (XTR) without using complicated peg-out mechanisms like drive chains or federated pegs.

Other things being equal, greater activity on the Ootle depletes the supply of Tari tokens faster. Mining rewards on the Minotari network in the form of XTM replenish the supply of XTR.

The Throttle actively controls the burn rate for XTR associated with every transaction on the Ootle. The Throttle is an algorithm run via consensus by validator nodes that periodically adjusts the burn rate to maintain the stability of the Tari ecosystem. The Throttle has three priorities in decreasing order of importance: to i) maintain the XTM: XTR peg, ii) maintain a stable supply of XTR + XTM, and iii) maintain a total token supply of 21 billion tokens.

Tari’s fast finality, sub-penny transaction fees, infinite scalability, programmable confidentiality features, and superior user experience make it the best platform to become the default value layer of the internet.

Slowly and then all at once.

Token distribution

70% to miners, 30% pre-mined

With 70% of the initial emission of XTM tokens going to miners, what’s the deal with the 30% pre-mined XTM tokens? The other 30% pre-mine is broken into four categories: Community, Protocol Infrastructure and Grants, Contributors, and Participants. Let’s talk about each in detail.

Community

A wise oncer once said, “No token, no community.” There’s no industry in the world like crypto, and we wouldn’t be here without support from the Tari community. Our community is our constellation, guiding us and the sole reason we exist. 5% of the total supply has been set aside for incentive programs to encourage and reward people for their engagement within the Tari community. When combined with the miner portion, 75% of the total initial supply is for the Tari community. On a go-forward basis, 100% of XTM tail emissions will be paid exclusively to the Tari community of miners who secure the network.

Protocol Infrastructure and Grants

Tari is a one-of-a-kind protocol design and network that presents unique challenges. We have set aside 9% of the initial XTM supply to meet these challenges and support the development of tooling necessary for operating the Tari network. After all, we’re not just building a network together; we’re crafting a world where every Tarian succeeds.

Contributors

For over six years, developers have developed meaningful innovations and made substantial efforts to build the Tari protocol from the ground up. 4% of the initial XTM supply is being set aside to reward participants for their contributions to the development of the Tari network.

Participants

Who are the participants? Before Tari was a protocol, it was a vision. Participants are the early supporters, backers, and believers who have supported the development of Tari from its very beginning. 12% of the initial XTM supply is set aside for these early backers, subject to a vesting schedule. The Tari community is forever grateful for their continuous and unwavering support.

Unlock schedule

How to pre-mine and vest over time

30% of the Protocol Infrastructure and Grants allocation will be reserved and available upfront for protocol liquidity.

Community tokens unlock every month for 12 months beginning six months after the mainnet launch. Protocol infrastructure and grants tokens unlock every month over 756,000,000 tokens available for four years, starting six months after the mainnet launch. Contributor tokens unlock every month for five years, beginning 12 months after the mainnet launch. Participant tokens unlock every month for two years, beginning 12 months after the mainnet launch.

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