Crypto economic model

The total Unova system comprises 3 levels (Blockchain/web3 level, Smart contract level, distributed application level). To maintain the full decentralization of the system each of these levels have their own pricing aspect built. On this page we will focus on the first two which are paid in and expressed in UON.

What is gas?

In a similar fashion to the Ethereum network, the Unova network uses the concept of gas.

Gas refers to the unit that measures the amount of computational effort required to execute specific operations on the network.

Since each Unova transaction requires computational resources to execute, each transaction requires a fee. Gas refers to the fee required to conduct a transaction on Unova successfully.

A standard transaction (financial transaction) requires 21 000 gas.

Transaction fees are paid in Unova’s native currency (UON). Gas prices are denoted in Gwei, which itself is a denomination of UON – each Gwei is equal to 0,000000001 UON. So, instead of saying each unit of gas costs 0,000000001 UON, you can say your gas costs 1 Gwei. We did not come up with this concept as it is proven to be useful for the Ethereum network so to make it easy to understand we created a similar pricing model into our own Unova Blockchain network. Some of the next parts will seem recognizable for anyone who is familiar with the Ethereum network aside from critical things we changed.

Blockchain transactions:

Calculating the total transaction fee works as follows: Gas units (limit) * (Base fee + Tip)

Let’s say Bart must pay Yannick 1 UON. In the transaction, the gas limit is 21 000 units and the base fee is 50 Gwei. Bart includes a tip of 10 Gwei.

Using the formula above we can calculate this as 21 000 * (50 + 10) = 1 260 000 Gwei or 0,00126 UON.

The ‘(50+10)’ represents the gas price paid per unit of gas used.

When Bart sends the money, 1,00126 UON will be deducted from Bart’s account. Yannick will be credited 1 UON. Miner receives the tip of 0,00021 UON. Base fee of 0,00105 UON is burned.

Gas limit / Gas used

A standard transaction (financial transaction) requires a minimum of 21 000 gas. This represents the computational effort to execute the transaction. For executing smart contracts or any other type of transaction this will be more.

Gas limit is a value the user wishing to execute the transaction (or smartcontract) can set. During the execution of the transaction the network will determine what the actual ‘gas used’ is. As long as the gas limit is larger or equal to the gas used the transaction will be executed successfully. If the gas limit set by the user exceeds the gas used the remaining part will be paid back to the user. If the gas limit is set too low, the transaction will stop in the middle and the UON could be lost as the transaction fails. As long as gas limit is set to 21 000 gas while executing a standard transaction there is nothing to worry about.

When using metamask as wallet it will automatically make sure the right value is set.

Base fee

Each block has a base fee. This base fee is determined by the network and calculated based on the previous block. To execute a transaction the gas price must be at least equal to or larger than the base fee (this is set by choosing a max fee).

The base fee is calculated independently of the current block and is instead determined by the blocks before it – making transaction fees more predictable for users. When the block is mined this base fee will currently be credited to the Unova wallet removing it from current circulation. Later this will change, and the base fee will be “burned”, permanently removing it from from circulation. This allows Unova in the initial phase to use these base fees as a development budget.

The minimum base fee that the Unova network accepts is 50 Gwei. Taking this into account the cheapest standard transaction fee = 21 000 x (50 + 0) = 1 050 000 Gwei = 0,00105 UON.

The base fee is calculated by a formula that compares the size of the previous block (the amount of gas used for all the transactions) with the target size. The base fee will increase by a maximum of 12.5% per block if the target block size is exceeded. This exponential growth makes it economically non-viable for block size to remain high indefinitely.

The target block size is equal to 10 million gas and the block limit is 20 million gas in the Unova network.

Blocknumber

Included Gas

Fee Increase

Current Base Fee

1

10M

0%

50 Gwei

2

20M

0%

50 Gwei

3

20M

12.5%

56,25 Gwei

4

20M

12.5%

63,28 Gwei

5

20M

12.5%

71,19 Gwei

6

20M

12.5%

80,09 Gwei

7

20M

12.5%

90,10 Gwei

8

20M

12.5%

101,36 Gwei

Priority fee (tip)

A tip incentivizes the miners to include transactions in the block and avoids miners creating empty blocks. Even a small tip is sufficient. Tips also represent a priority fee, if transactions need to get preferentially executed ahead of other transactions in the same block a higher tip will be necessary to attempt to outbid competing transactions.

Max Fee

Since the user does not set the base fee but can set a priority fee and the base fee could be changing going from one block to the next instead the user can set a ‘Max Fee’.

Max Fee = (base Fee + priority fee)

Max Fee should be set at least equal to 50 Gwei to cover the minimum base fee.

To make our transaction fees even more predictable and especially stable expressed in EUR even after UON would be publicly traded we have designed another solution.

Read about our future transaction fee calculation update

Using the unova applications & smart contracts

A smart contract is like a set of rules that live on-chain for all to see and run exactly according to those rules. Imagine a vending machine: if you supply it with enough funds and the right selection, you’ll get the item you want. And like vending machines, smart contracts can hold funds much like your Unova account. This allows code to mediate agreements and transactions.

Once smart contracts are deployed on the Unova network you can’t change them. Dapps can be decentralized because they are controlled by the logic written into the contract, not an individual or a company.

Executing a smart contract (which can be any piece of code) works in a similar fashion as executing a financial transaction. The smart contract is activated by sending a transaction to the smart contract address.

When it comes to transaction fees the main difference is that the Gas used and thus gas limit that should be set will generally be higher for smart contracts as the computational effort is higher. In addition to this, the smart contracts as part of the unova Dapps have an additional value ‘Application fee’ which is a development reward for unova.

The smart contracts created by Unova are executed by the company nodes and mainly used for data distribution between supply chain stakeholders. Therefore, the values set to activate these smart contracts are fixed and companies joining the system do not need to worry about it.

Simulation tool to calculate the price of a bundle distribution to all supply chain stakeholders:

Working on it

Custom developments/monthly recurring SAAS

Generally, there are additional development costs, pilots and in some cases SAAS fees for specific platforms/tools/Dapps or implementations.

Contact Unova for further information about doing a pilot.