Nervos' token economics have been carefully designed to incentivize miners with long-term rewards for securing the network and provide long-term $CKB investors the equivalent of a supply-limited cryptocurrency similar to Bitcoin, which is considered by many to be deflationary.
To accomplish this, Nervos incorporates primary issuance, secondary issuance, and the Nervos DAO.
Primary issuance gives a fixed amount of $CKB rewards to miners for securing the network, and that amount halves approximately every four years. Eventually, the rewards will become very small, then cease completely, in a pattern nearly identical to Bitcoin.
Secondary issuance creates a fixed amount of $CKB every year, which is paid to miners for state rent, to users of the Nervos DAO, and what is left over is placed in the Nervos treasury.
When long-term $CKB investors put their $CKB in the Nervos DAO, interest is paid that matches the rate of inflation created by secondary issuance. This offsets the inflation 1:1, meaning that the effective monetary policy for those who hold their $CKB in the Nervos DAO is nearly identical to Bitcoin holders.
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