Token Economics

PRVNZ Token Properties

• Type: Utility token (not security, not currency)
• Purpose: Enable high-throughput digital rights transactions
• Backing: 1:1 with Bitcoin (1 PRVNZ = 1 satoshi)
• Supply: Dynamic (minted on deposit, burned on redemption)
• Cap: No maximum supply (limited by BTC deposited)
• Minimum Unit: 1 satoshi (0.00000001 PRVNZ)

Why Not Use Bitcoin Directly?

Bitcoin's Limitations for Digital Rights:

• 10-minute blocks: Too slow for high-frequency royalty payments
• Limited throughput: ~7 TPS insufficient for licensing marketplace
• No native smart contracts: Cannot express complex licensing logic
• Lack of privacy: All transactions public
• High fees during congestion: Micropayments become uneconomical

PRVNZ Solution:

• 2-second finality: Fast enough for real-time licensing
• 270,000+ TPS capacity: Scales to handle global industry volume
• Programmable vaults: Complex licensing logic
• Configurable privacy: Selective disclosure
• Efficient micropayments: Batch and optimize fees

Minting (Deposit BTC)

1. User sends BTC to treasury multisig address
2. Wait for 6 confirmations (~1 hour)
3. Validators verify deposit
4. Mint equivalent PRVNZ tokens
5. Reserve ratio remains 1.0

Example:

User deposits: 0.01 BTC (1,000,000 sats)
Treasury receives: 0.01 BTC
PRVNZ minted: 1,000,000 PRVNZ
Reserve ratio: 1.0

Burning (Redeem BTC)

1. User burns PRVNZ tokens on PRVNZ blockchain
2. Provide BTC address for redemption
3. Validators create Bitcoin redemption transaction
4. Collect threshold signatures (3-of-5)
5. Broadcast BTC transaction
6. User receives BTC
7. Reserve ratio remains 1.0

Example:

User burns: 500,000 PRVNZ
Treasury sends: 0.005 BTC (500,000 sats)
BTC transaction fee: 0.00001 BTC (1,000 sats, user pays)
User receives: 0.00499 BTC (499,000 sats)

PRVNZ Network Fees

Transaction Fees:

• Standard transaction: 0.01% of value (10 basis points)
• Minimum fee: 100 PRVNZ (100 sats)
• Licensing transactions: 0.1% of license value
• Fractional transfers: 0.05% of transfer value

Fee Distribution:

• 60%: Validators (proportional to work)
• 20%: Treasury reserve buffer
• 20%: Protocol development fund

Example Fee Calculations

Standard Transfer:

Transfer: 10,000 PRVNZ
Fee: 0.01% = 1 PRVNZ
Net transfer: 9,999 PRVNZ

License Purchase:

License cost: 100,000 PRVNZ
Fee: 0.1% = 100 PRVNZ
Total cost: 100,100 PRVNZ

Redemption:

Amount: 1,000,000 PRVNZ
Burn fee: 0.1% = 1,000 PRVNZ
BTC network fee: ~1,000 sats (user pays)
Net redemption: ~998,000 sats

Reserve Ratio

Formula:

Reserve Ratio = Total BTC in Treasury / Total PRVNZ Supply

Target: 1.0 (100% backing)
Minimum: 1.0 (never below)
Buffer: >1.0 (excess reserves from fees)

Reserve Buffer

Purpose: Absorb temporary imbalances

Sources:

• 20% of transaction fees
• Unclaimed redemptions (after 90 days)
• Dust accumulation
• Donation address

Target Buffer Size: 5% of total reserves

Validator Rewards

Revenue Sources:

• Transaction fees (60% of total)
• Block rewards (none - PoA model)
• Licensing fees (60% of licensing fees)

Cost Structure:

• Hardware (TEE-capable servers)
• Bandwidth (1Gbps+ recommended)
• Electricity (moderate, no PoW mining)
• Operations (24/7 monitoring)

Validator Requirements

Bond Deposit: TBD (amount under discussion)

Uptime Requirement: 99.9% (max 8 hours downtime per year)

Slashing Conditions:

• Double signing: 10% of bond
• Extended downtime (>24h): 1% of bond
• Attestation failure: 5% of bond
• Malicious behavior: 100% of bond + removal

Digital Rights Licensing

1. Producer uploads master recording to vault
2. Creates licenses (exclusive, non-exclusive, sync)
3. Prices licenses in PRVNZ
4. Buyers purchase with PRVNZ
5. Royalties automatically distributed in PRVNZ

Fractional Ownership Trading

1. Asset owner fractionalizes vault (e.g., 1,000 shares)
2. Lists shares on marketplace
3. Investors buy/sell shares with PRVNZ
4. Royalties distributed proportionally

Attack Vectors & Mitigations

Mint Inflation Attack:

• Attack: Fake Bitcoin deposit, mint PRVNZ
• Mitigation: 6 confirmations, validator consensus, on-chain verification

Reserve Depletion:

• Attack: Redeem more PRVNZ than BTC available
• Mitigation: Automated reserve checks, halt minting if ratio < 1.0

Parameter Adjustment

Governable Parameters:

• Transaction fee rates
• Redemption fee rates
• Validator reward distribution
• Reserve buffer target
• Confirmation requirements

Governance Process:

1. Proposal submitted (validator or community)
2. Discussion period (7 days)
3. Voting period (14 days)
4. Execution (if passed, after 7-day timelock)