7). Rewards Plan

MTT Network's validator reward mechanism is inspired by the Bitcoin issuance model, adopting a gradual halving mode to ensure long-term network stability and token value appreciation. Specifically, MTT Network will conduct a reward halving every four years, with an initial total supply of 210,000,000 MTT tokens.

a. Reward Distribution and Halving Mechanism

MTT Network distributes MTT tokens to validator nodes through block rewards. Validator nodes generate new blocks by participating in the consensus algorithm (Tendermint BFT) and receive rewards based on block generation. To pay homage to Bitcoin's economic model, MTT Network has designed the following reward mechanism:

• Initial Reward: In the network's first block cycle (i.e., the first four years), each new block will issue a fixed amount of MTT tokens as a reward. The total amount of initial block rewards will be calculated based on the distribution plan of 210,000,000 tokens.

• Four-Year Halving: Every four years (based on block height), the block reward will be reduced by half. This halving process will continue until the block reward is reduced to nearly zero, achieving a deflationary model similar to Bitcoin.

• Reward Distribution: The reward for each new block will be equally divided among validator nodes participating in block generation and consensus. The rewards not only incentivize validator nodes to actively participate in network maintenance but also encourage token holders to delegate tokens to validator nodes for returns.

b. Token Release Schedule

• Years 1-4: The initial reward for each block is X MTT tokens (X will be set based on the number of validators and distribution plan at that time). This phase is expected to release approximately 105,000,000 MTT tokens, accounting for 50% of the mining supply.

• Years 5-8: The reward for each block will be halved to X/2 MTT tokens, expected to release approximately 52,500,000 MTT tokens, accounting for 25% of the mining supply.

• Years 9-12: The reward for each block will be halved again to X/4 MTT tokens, expected to release approximately 26,250,000 MTT tokens, accounting for 12.5% of the mining supply.

• Thereafter: Block rewards continue to halve every four years until the issuance of new tokens becomes extremely small, approaching zero.

c. Long-term Impact of the Mechanism

• Deflationary Effect: Over time, the growth rate of token supply will gradually slow down and eventually approach a constant. In the long run, this will lead to a gradual increase in the scarcity of MTT tokens, helping to maintain their market value.

• Long-term Incentives: Although mining rewards will gradually decrease over time, the overall user base of MTT Network is continuously increasing. The utility of MTT tokens in the MTT Sports Platform will lead to positive operations of the treasury. Through DAO governance, certain revenues can be allocated to miners, enhancing their enthusiasm for participating in network consensus and achieving a dynamic balance between network users and validators.

• Network Security: The reduction in validator rewards will encourage network validators to maintain their competitiveness in the network by increasing stake amounts, optimizing operational costs, etc., thereby maintaining the overall security and decentralization of the network.