Rewards

Incentives and allocation of rewards

Rewards

Validators earn rewards on the open protocol and as members of cohorts invited by creators of crypto asset whitepapers, Process Controls and financial statements.

Validators are rewarded for validating crypto asset whitepapers, financial statements and "Tokenized Process Controls" that are created by the community.

Rewards are derived from three sources: direct payments, subsidies and royalties. All are subject to governance.

The tables below illustrate how the percentage of rewards are allocated across the token economy based on each role. Royalties are a separate source of income.

Open Protocol Allocation

Validation rewards are subject to governance and are initially allocated on the open protocol as follows:

ALLOCATION	STRUCTURED DISCLOSURES	PROCESS CONTROLS
Winning Validator	20%	35%
Corroborating Validators	18%	30%
Process Control Owners	40%	-
Future Subsidy Replenishment	10%	15%
Liquidity	5%	5%
DevSecOps	3%	5%
Governance Staking	2%	2%
AIrdrops/Grants	2%	8%
TOTAL	100%	100%

Cohort Allocation

Validation rewards are subject to governance and are initially allocated within cohorts as follows:

ALLOCATION	STRUCTURED DISCLOSURES	PROCESS CONTROLS
Winning Validator	50%	50%
Corroborating Validators	30%	30%
Process Control Owners	5%	-
Future Subsidy Replenishment	1%	15%
Liquidity	2%	5%
DevSecOps	2%	5%
Governance Staking	1%	2%
Airdrops/Grants	9%	8%
TOTAL	100%	100%

Royalties

In addition to the validation rewards, there is a separate royalty system for Process Controls created by users to train Pacioli to do it’s work. Process Controls are represented by NFTs. The creator claims them after they are validated and proven to work correctly. The validators who validate them receive royalties each time they are used.

There are 4 types of Process Controls:

• Crypto Asset Disclosure Controls

• Financial Statement Controls

• Audit Controls

• Analysis Controls

The number of Process Controls that can be created is unlimited.

NOTE: Deactivation results in the loss of the perpetual royalties on Process Controls validated.

Every time a Process Control is used, the royalties are allocated as follows:

ROLE	PERCENTAGE
Process Control Creator	40%
Winning and Corroborating Validators	40%
Project Wallet	20%

Claiming

All rewards are cumulative for gas efficiency and can be claimed at any time. Rewards are claimed from a claim contract by each validator.