Emissions Burn
Our goal is to operate PTN with long-term sustainability and alignment at its core. As we continue to scale with Theta, it’s clear that the current emissions structure has grown out of sync with trading performance, capital usage, and long-term tokenomics. To address this, we are implementing a burn of emissions to miners and the subnet owner proportion. This is a realignment of incentive that will strengthen the foundation of a healthier, more competitive, and attack-resistant ecosystem.
Problem Statement: Over-Emissions and Misaligned Incentives
Our analysis shows that under current conditions, miner emissions have become disproportionate to the value generated by trading performance.
$450 (current Tao price) * 120 Tao (daily miner emissions) * 365 days * 10-15% miner take for top miners ≈ $3M annually
Today, top miners can receive the equivalent of $3M/year in emissions. In contrast, if those miners have annualized returns around 30%, they would pull in approximately $30k on a $100k account size or up to $150k on a $500k account. A $3M payout for $30k returns means that the network is overpaying by up to 100x relative to their capital efficiency.
This outsized emissions structure creates two major risks:
- Inefficiency: Overpaying for results that don’t scale with capital usage.
- Gaming Risk: Incentivizing users to register many miners with the hope that one will succeed, rather than building sustainable, high-performance strategies.
Increasing the miner capacity would reduce overpayment but would also require a proportional increase in registration cost. This would hinder the registration of new miners, so we are opting to keep capacity at $100k and registration costs at 2.5 Tao.
Solution: Burning Excess Emissions
We are reducing miner and subnet owner emissions through a burn. The burn percentage is calculated using the current price of Theta to cap the payouts at 30x the annualized returns of the top miner.
Total dollar emissions per tempo = Theta emissions per tempo * Theta price
Annualized dollar returns per tempo = Annualized miner returns * capital / number of tempos annually
Adjusted payout weight = Annualized dollar value returns of top miner per tempo * 30x multiplier / total dollar value of emissions per tempo
Burn percentage = 1 - Adjusted weight / Full scoring weight
As an example, if the top miner has a 35% annualized return, that translates to $35k on a $100k portfolio. Per tempo, the top miner makes $35000 / (365 * 20) = $4.80. The current price of Tao is $450, and 6 Tao worth of Theta, equalling $2700, are emitted to miners per tempo. The top miner’s adjusted payout weight is then capped at $4.80 * 30 / $2700 ≈ 0.05. Their current weight is roughly 0.15, so the amount to be burned is 1 - 0.05/0.15 = 67%.
This means that in this example, 33% of total emissions are distributed as payouts to miners, and the remaining 67% will be burned.
Our long-term goal is to move to a fully performance-aligned reward structure. By the end of Q2 2025, we aim to implement alpha-based collateral, being one of the first subnets to do so. As collateral and competition increase, so will capacity limits, leading to larger payouts for truly high-performing miners. We expect zero emissions to be burned by the end of 2025, once collateral is fully rolled out.
As emission burns decrease over time and collateral grows, we expect to see an elite set of miners emerge—those who consistently outperform and drive user value. We remain committed to transparency and fairness as we navigate this transition and welcome the community’s feedback as always.
Timeline
Integration: May 19, 2025