Fees, burning and ADS staking

Adshares fees are related to three burning mechanisms embedded in the system. Burning temporarily reduces the free floating supply. Liquid staking rewards bring back the burned ADS to long term holders every 2048 blocks.

Adshares Blockchain fees

The network transaction fee is 1‰ (one per mille) of which: * 20% goes to node operator account * 80% is burned When transaction is made internally in one node, the fee is 2 times lower.

Adshares Protocol fees

The protocol fees are tied to application layer where: * 1% of ad turnover of every AdServer is burned.

ADS Wallet inactivity fee

There is a third burning mechanism in Adshares ecosystem which is a small inactivity fee after 2 years to encourage regular checking of key backups and prevent permanent loss of coins. The inactivity fee is 1 promile every 2048 blocks. ADS charged due to inactivity fee are burned. Thanks to this mechanism, uninterrupted network activity is ensured. We encourage you to log into your account and make at least one empty transaction during the year. Wrapped ADS can be used to avoid inactivity fee. Using ADS bridged to Ethereum, BNB chain or Polygon as an ERC-20/BEP-20/MATIC token will prevent the fee. However, it is worth remembering that the wrapped ADS token will not participate in the liquid staking.

Adshares (ADS) Liquid Staking

The burning mechanisms are causing the temporary deficit of ADS in circulation in relation to total supply. The blockchain is rebalancing its circulating supply in 2048 blocks cycles in form of liquid staking rewards. Every cycle (~ 2 weeks) the burned ADS amount comes back to circulation as liquid staking rewards are distributed proportionally between all accounts with a positive ADS balance and activity in last 12 months. This creates mechanism that ADS are flowing from active users (who pay fees) to long term holders. For example, if there are 100,000 ADS in unpaid staking rewards balance, a person with 387582 ADS (1% of the total) will receive 1000 ADS of the reward, while a person with 3875 ADS will receive 10 ADS of the staking reward.