During this time, I have been researching the block reward mechanism of Midnight, and I must say that its reserve pool allocation model is more sophisticated than many people imagine.
Most public chains on the market adopt a halving model; for example, Bitcoin halves its rewards every four years, which has a clear cycle and can easily lead to periodic supply and demand fluctuations. However, Midnight has taken a completely different approach.
Rather than distributing rewards based on a fixed value, it allocates them according to the proportion of the remaining reserve pool for each block. With each block produced, the reserve decreases by the corresponding proportion, and naturally, the rewards for the next block decrease.
In this way, block rewards continue to decline smoothly and gradually, without sharp halvings or sudden supply shocks, just a curve that continuously approaches zero.
According to the calculations in the white paper, this mechanism can allow the reserve pool to operate for hundreds of years. This is not just a publicity stunt, but a natural result brought about by a mathematical model.
This also means that early participants will have slightly higher returns than those who join later, and this advantage is mild and long-lasting.
Of course, I am also contemplating whether a running cycle of hundreds of years really holds significance in reality, as the industry environment could change drastically in just a few decades. @MidnightNetwork
Do you think this is the most sustainable reward design in the crypto field, or is it an overly idealized mathematical elegance?