CERM: Coin Emission Rate Modulation

(CERM v0.1 in Bitmark v0.9.7)

Emission Cap and Supply

Total Supply (Exact Current Money Supply)
21,323,539.83836305 BTMK
Remaining to be Mined
6,256,460.16163695 BTMK
Emission Cap
27,580,000 BTMK

77.32% of the emission cap issued · Supply file updated

The page reads the latest recorded money supply and subtracts it from the 27,580,000 BTMK emission cap.

CERM affects the rate of emission, not the cap.

The maximum emission cap has never changed: it has remained at 27,580,000 BTMK since the first day of Bitmark’s network launch in 2014.

Introduction

Most cryptocurrency emission schedules are based on Bitcoin's model, where the block reward reduces over time. In Bitcoin, this "halving" occurs approximately every four years; for instance, the initial 50 BTC reward was halved to 25 BTC, then to 12.5 BTC, and so on.

Bitmark evolved this scheme by adopting intermediate "quartering" steps between halvings. The reward schedule was designed with both halvings {20, 10, 5, 2.5, ...} and intermediate quarterings {15, 7.5, 3.75, ...}.

This results in a smoother emission curve, with the complete sequence of rewards being:

{20, 15, 10, 7.5, 5, 3.75, 2.5, 1.25, ...}

Abstract

Bitmark introduces Coin Emission Rate Modulation (CERM), a dynamic algorithm that adjusts block rewards based on network hash rate conditions. Unlike fixed emission schedules, CERM ties rewards to the health and activity of the network, ensuring sustainable issuance over time while preserving the original total supply cap.

The algorithm compares the average hash rate of the most recent day to the highest daily average observed over the past year. This ratio, known as the Emission Scaling Factor (ESF), determines whether blocks receive the full nominal reward or a reduced amount. Rewards can scale down proportionally but never fall below 50% of the nominal reward, guaranteeing a minimum emission floor.

Concept and Rationale

The main idea behind CERM is to periodically adjust the rate of coin emission to match network demand. Since demand cannot be measured directly, the closest intrinsic blockchain analog is hashrate.

High Hashrate

A higher hashrate signifies that more miners are active because there is high demand for the coin. In this state, coin emission should be high to meet this demand.

Low Hashrate

A lower hashrate suggests lower demand. The emission rate should decrease to avoid flooding exchanges with coins that could depress the price.

Overview of the Mechanism

CERM v1.0 works by scaling half of the nominal epoch reward according to the Emission Scaling Factor (ESF):

ESF = current_hashrate / peak_hashrate

Every 720 blocks (approximately one day), the algorithm performs the following check for each of the 8 mining algorithms:

  1. It examines the daily average hashrate figures from the past 365 days and selects the single highest value. This becomes the peak_hashrate.
  2. It defines the average hash rate of the just-completed day as the current_hashrate.

Result: If current_hashrate is lower than peak_hashrate, the reward is proportionally scaled down. However, the scaling only applies to 50% of the reward, guaranteeing that miners always receive at least half of the nominal amount.

Key Definitions

Block Reward

The number of new coins emitted in a block.

Nominal Block Reward

The baseline block reward for an era, before CERM adjustments.

Peak Hashrate

The highest average daily hash rate observed over the past year (365 days).

Current Hashrate

The average hash rate from the just-completed day (720 blocks).

ESF (Emission Scaling Factor)

Ensures rewards scale dynamically with network strength. (Formerly called Subsidy Scaling Factor, SSF).

Epoch (Era)

A period defined by a number of blocks where a nominal reward applies. Under CERM, an era may be extended if rewards are reduced.