Challenges in TEA token economy design

money monkey

Token economy design is neither easier nor less important than technical design in terms of a blockchain project. As a code monkey, I learned a lot about economics in recent years, but I still feel shaky when designing the TEA token economy. Thankful I got a lot of help from our community members, such as “Blue Fox”. Today, I will talk about the challenges I was facing and how we plan to overcome them in my future blogs.

Roles in the TEA ecosystem that need to deal with

Miners(or farmers): They buy or rent physical or virtual TEA mining machines. They earn reward from the execution of tasks the TEA consensus assign to them. The reward is paid in TEA token, $T for short. Camellia: The name comes from the plant that tea harvests from. In our TEA Project, Camellia is an NFT, CML for short. A TEA mining machine has to have a CML associate to become an “active” mining node. CML can be traded as it has value. It also has its life cycle. It was born from seed. It grows and eventually dies. Investors(or landlords): They do not want to deal with the hassle of maintaining a TEA mining machine. They are pure capitalists. They stake their $T to a Camellia owned by a miner. They receive revenue share in $T from this camellia as a shareholder. DAO: The decentralized autonomous organization that governs the ecosystem. Assume it is a Utopian-Capitalism-type democracy government. Members vote using their stake to make decisions. Last but not least, $T is not a role. It is a utility token. Its value is pegged to measurable computing consumption.

The challenges

Do you think these are way beyond what a code-monkey is supposed to deal with? Well, that’s true. However, as a crypto entrepreneur, I have to deal with them.

$T: the stable utility token for decentralized trusted computing

Miners need incentives to run nodes. $T is their reward.


When designing the $T, there are many options. Should it have a cap on total supply? Should it be a stable coin? If yes, what should it peg to? How to calculate the value? Should it be an asset or a currency? This is the most important decision I have to make first in the TEA Project token economy. I did run through many versions. All of the previous versions have one or more problems. I finally balance the pros and cons, select the current version. I hope this is the last final version.

A new type of stable coin

$T is a stable coin pegging to the consumption of computing resources. Computing resources mean CPU instructions, RAM size, network traffic, storage, etc. Stable doesn’t mean it is stable compare to any fiat currency. Over time, computing costs will be lower and lower, so the $T value should drop if measured by another fiat. However, for a specific computer task, the $T is stable. Whenever you run the same computing task, it will cost the same amount of $T. If the value of $T won’t rise, what’s the point for investors. Here is the trick. The investors won’t be rich by holding the $T without investing them in something else. This is like holding USD won’t make you rich, but invest USD in a startup company may make you rich. Investors invest $T to Camellia, the most important concept in the TEA Project.

Camellia, an NFT with a life


Camellia, the plant that produces tea, is an NFT in the TEA ecosystem. Frankly, I drink tea but do not know too much about how tea was made. The only thing I know is Camellia can produce tea. That’s it. So I use this name which I think makes sense. Miners can setup a TEA node (the mining machine) on their own, but they still need Camellias to start mining. Camellia here is a kind of qualification of mining. Camellia is an NFT. Every camellia could be different somehow, such as classification, age, current owner, credit history, etc. All these properties define the outcome of this camellia. For example, if it is too young or too old, it could not make as much tea as a mid-age camellia. Some types of camellia are less productive than others. Some types live longer than others. That’s why the price of Camellia may vary. Camellia itself is a big topic. We can talk in my future blogs. Please stay tunes. Let’s stick with $T in this blog.

TEA pegging

Unlike traditional cloud computing service providers, you cannot hire a miner to work for you for 10 hours. You won’t know, no one knows, which miner will be chosen to run your task. This is very important to keep zero knowledge to prevent attacks. TEA consensus will choose a VRF miner to run your task. The TEA will measure the cost of computing as the “gas” fee. This is similar to Ehtereum’s “gas” fee, so are the “tips.” But TEA will be much cheaper than Ethereum’s cost because we do not need to run the same code on millions of nodes. We have a different way of consensus to get the trust.

The profitability of a Camellia and the Dispatching Algorithm

As a miner, you do not know and do not care what tasks are running in your node since you have no choice. What you can do is to get a higher chance to win some high-value tasks so that you can make more $T. The probability is the core algorithm of TEA PoT Consensus.

Camellia life

In general, you can get a higher chance if your camellia is

All these properties are in the NFT definition. Such a high outcome camellia earns more $T for its owner, the miner and the stakeholders behind him. If the miner wants to sell it to someone else, of course, the price could be high.

Assume the miner bought such a camellia from the seed when the price is meager because a young camellia usually has a pretty low outcome. If the miner sells it after it grows, the miners can earn the capital gain. This is one way to make an ROI.

Stake slots and investors

Miners can invest $T to buy camellia and sell at a higher price for ROI. How about the investors? Investors do not maintain TEA nodes but still make money from investing in camellias. Each camellia has a stack of “stake slots” that investors can stake their $T into. Similar to investing in a company, the investors are shareholders. They earn dividends from the camellia.

Camellia staking

The position of stake slots means different “weights” when distributing revenue. The lower the index (near the bottom), the higher weight. No doubt, when a new camellia is born, the lowest open slot is first occupied by the fastest investor. By the way, the stake slot with index zero is dedicated to the miner himself. This is the only stake slot that cannot unstake unless the miner sells the camellia. An investor can unstake their stake slots at any trading window. However, once unstake, the upper slots occupy the open position. If he wants to invest again in this camellia, he can only stake the upper slots at the same price but much less weight. This design encourages the investors to make long-term stake investments rather than short-term ones.

Trading window and stake slot size

To minimize the system design, we predefined the trading window and slot size. However, these numbers can be updated by DAO or changed when the TEA main net starts. These are the placeholder numbers. Each slot worth $T1000 regardless of the position. There is a trading window every 1000 blocks. For example, when the block height is 1000, 2000, 3000… n*1000, the investors can stake and unstake the slot at these blocks. Investors can only stake or unstake a full slot ($T1000).

Risk of staking

As an investor, staking on a camellia owned by a miner may cause a risk. The stake shares both revenue and risk. If the miner is a bad actor, he can run a malicious TEA node trying to cheat the system. Any random verifier can report this via Remote Attestation. Once the TEA consensus confirmed this illegal behavior, the miner will get a penalty up to burn all stakes. So before staking on a camellia, make sure you search this miner’s credit history to control your risk.

We will talk about Camellia, which is more interesting than $T because it has life!

Camillia, an NFT that could die

More or less you have probably known that TEA is a DAO of cloud computing miners(we sometimes call them farmers, TEA farmers). They run TEA nodes. TEA nodes work together to provide decentralized trusted computing services to traditional clients or modern blockchains. I explained $T token, the fuel (gas) of the TEA token economy in my last blog. Today I will explain Camellia, the soul of TEA nodes.

any tasks and no incentive $T even if you run your dead TEA node for years.

Camellia is the NFT that presents the soul of your TEA node. It describes what type of Camellia (hardware, software stack, versions), date of birth (how old are you?), staking slots, and credit history (have you done anything stupid before?). All of this information is stored and can be verified on TEA-layer1 blockchain. The Camellia NFT defines your TEA node’s productivity, life span, and the most important, value.

Let’s assume in real life, you are a farmer, you want to run a real tea business. You need to buy a camellia seed and plant it in your farmland. If you do not own farmland, or your farmland is not big enough, you can rent from a landlord. Your camellia is not productive when it is very young. When it grows it starts to make TEA for you. Different types of camellia produce different types of tea. Of course, different kinds of tea are different in price. Your landlord shares some of your revenue.

Now let’s get back to our decentralized trusted computing business. Your node is your farmland. There are some investors to stake on you by purchase your staking slots as I mentioned in previous blogs. You buy Camellia NFT seed and plant it in your TEA node. Your TEA node is live now. It works with other TEA nodes and starts making revenue ($T). Of course, it is not very productive in the beginning. But after it grows up, it makes a lot of revenue. Of course, your stakeholders take some dividends as investors. When the camellia gets older, productivity drops. Eventually, it will run to the end of life and death. You will need to buy a new camellia seed and starts from the very beginning. You can trade the Camellia NFT in the exchange at any time. Your investors can trade your staking slots too. The capital goes to the highest ROI.

You can see the TEA token economy is exactly a mirror of an economy in real-life. So you won’t be surprised that Camellia will die as all of us will.

There are many benefits that I design the Camellia to die.

Imagine that people never die, what our human society will be like today?

What is the TEA project’s investment value given Camellia NFT will die and TEA is a stable token?

I won’t be surprised that you would ask if you read my previous blog: Camellia, an NFA that dies. Let’s see what our real-life economy runs.

The USD is a worldwide currency. Assume USD is a stable coin although it inflated faster and faster. You are not supposed to keep the USD bill in your vault and expect it to grow, right? What you are gonna do? Of course, to invest. Let’s see you invest your USD capital in businesses. Every business in the market is an NFT. The business born, grows, and eventually dies. Every business is unique. It has a different business model, different management team, different life span. If you invest in a blue-chip or early start-up, you will have different gains and risks. Rain or shine, most investors make more money than keep their money sleep in the bank account.

Let’s turn back to the TEA economy. $T is USD. Holding $T in your Gluon wallet won’t make you rich. You will need to invest. You can use your $T to buy Camellia seed and grow it. You can either make money from the $T generated from the Camellia mining or just simply sell it after it grows up. Remember the young camellia won’t be as productive as a grown one. So the price will be different by their age. Another choice is to buy other miner’s staking slots. In this case, you gain the shared revenue from other miners. Because every camellia is a different NFT, and every slot has a different “weight”. Find the ideal slots to invest is the key to your investment strategy. This is just like investing in a start-up or a blue-chip. All have their own pros and cons.

If you are smart and not too greedy, you can probably earn a lot from investing your $T in the TEA economy rather than sell them in the market. This helps “lock” the $T and maintain a stable $T token price. Especially in the early stage of the TEA eco-system.

There are a lot of detailed designs on the TEA token economy. I am trying to design an ideal token economy based on what I learn from economics.