6.1. Checkpoints

Datagram’s rewards system provides $UDP and $TCP reward points to Full Core operators based on their network contributions, which are later converted into $DGRAM at a fixed rate. These points correspond to two fundamental types of internet traffic: User Datagram Protocol UDP and Transmission Control Protocol TCP, covered above in Section 6.1.

Rewards are distributed via a controlled daily emissions model that follows a three-stage process, with each stage referred to as a “checkpoint.” For instance, Checkpoint 1 rewards based on Full Core availability, while Checkpoint 2 rewards are based on latency.

These are as follows:

1. Uptime & Availability (Checkpoint 1): Rewards Full Cores that maintain high uptime, ensuring network stability by verifying computational contributions, data availability, and bandwidth reliability.

Rewards here are chosen based on three factors:

• Proof of Work via Compute: Verifies that the Full Core is providing computational resources.

• Proof of Data Storage via Availability: Ensures data stored on the Full Core is accessible.

• Proof of Bandwidth via Data: Measures the volume of data the Full Core transmits or receives, ensuring bandwidth reliability.

Initially these will each be allocated roughly one-third of the total rewards.

However, the long-term plan is to transition to a more dynamic system where the distribution shifts over time to reflect real-time network demands better. As the ecosystem evolves, these segments will adjust to prioritize the areas most critical to the network's health and efficiency. By allowing the distribution to adapt, the system can continually incentivize what the ecosystem needs most, such as scaling computational power, ensuring data availability, or optimizing bandwidth resources, ensuring that the infrastructure grows in alignment with network requirements.

1. Latency & Response Times (Checkpoint 2): Rewards low-latency, high-availability nodes by measuring their response times and overall network efficiency. Full Cores with the fastest and most reliable performance are selected for more traffic routing, increasing their earning potential.

2. Actual Usage (Checkpoint 3): Rewards based on real-world resource consumption, compensating Full Cores that contribute the most bandwidth, computing power, and storage to the network.

During the testnet phase, rewards will be solely determined by Checkpoints One and Two, with 100% of the distribution divided among available Full Cores based on uptime and performance. As the network scales and usage increases, the reward structure will adjust to reflect actual resource consumption.

For the first year of Datagram’s deployment, 80% of daily emitted rewards will be allocated based on uptime, while 20% will go to a usage-based pool to incentivize Core operators to maintain reliable service as the ecosystem gains initial traction. However, over time, the reward structure will likely shift toward usage-based metrics.