TNZO

Abstract

TNZO is the unit the Tenzro network runs on. It pays network fees and settles work, it is what validators and providers bond, it rewards verified work, and it is what governance votes in. Fees are priced in dollars and paid in stablecoins or TNZO. Rewards follow paid, verified work only: served units, verified availability and validator duties. Supply follows usage: fees burn TNZO, and rewards enter circulation only against verified activity. Demand comes from paid use by critical services that need verifiable AI, agents acting for people and companies, autonomous agents and developers, served by independent operators who are paid per completed unit. Stake and bonds unbond over a governed period. Slashing burns the offender's bond. The Tenzro Foundation is the governing body for TNZO, and protocol parameters are set by on-chain governance.

1. Introduction

A network where humans, agents and machines transact needs one unit that the protocol itself charges, bonds and votes in. If every service had its own fee token, an agent would need to hold a dozen assets to finish one workflow. TNZO is that unit. Buyers and sellers who price in dollars settle the underlying payment for a service in a stablecoin; TNZO is what the protocol layer uses.

This paper specifies TNZO's uses, the fee model, how supply follows usage, rewards, staking and bonds, slashing, the treasury and governance.

2. Supply

Supply follows usage. TNZO is created only on the Tenzro ledger, and no transaction, contract or governance action creates it outside the rules below. Two flows move it:

• Burns. The burn share of every fee, and every slashed bond, is destroyed. Paid use burns TNZO.
• Rewards. Each epoch, rewards enter circulation only against the verified work recorded in that epoch, with the provider and ecosystem shares capped against the paid revenue they settled.

Anyone can read supply figures from the ledger. tenzro_totalSupply returns the total supply, and tenzro_getSupplyMetrics returns circulating supply and a breakdown of burns by channel.

curl -s https://rpc.tenzro.com \
  -H 'content-type: application/json' \
  -d '{"jsonrpc":"2.0","id":1,"method":"tenzro_getSupplyMetrics","params":[]}'

3. Uses

3.1 Fees

Fees are priced in dollars. Gas for every transaction on the ledger, in any runtime, is paid in TNZO at the network's own rate. A payer who holds only stablecoins pays for services over x402, which needs no TNZO.

3.2 Settlement

TNZO settles transactions between participants: payments for inference, compute, storage, data and attested execution, and for the work of applications built on the network. When a service payment settles, the network's share of it is taken in TNZO. See Settlement for the Machine Economy.

3.3 Bonds and security

Every role that the network relies on posts a TNZO bond:

Bonds sit on a ladder of amounts that governance can adjust. Compute, storage and cloud bonds scale with the capacity pledged. A node can sync and relay without a bond, but only bonded validators carry quorum weight.

3.4 Governance

TNZO stake is the basis for governance: proposal deposits, votes and delegation. See section 9.

4. Fees

4.1 Gas

Gas follows an EIP-1559-style fee market.

• Each block has a base fee that rises when blocks are fuller than the target and falls when they are emptier, within bounds.
• Every transaction pays the base fee for the gas it uses, plus an optional priority fee.
• The base fee is split between burn and treasury. By default the base fee is burned in full; governance can direct part of it to the treasury.
• The priority fee goes to validators.

The fee split is applied when a block is finalised, from the amounts actually charged, on every node that finalises the block, so all nodes agree on balances, burns and the treasury.

Because the base fee rises with demand, an attacker who fills blocks pays the elevated fee they cause. Spam is self-defeating.

4.2 Sponsored gas

Another account can send a passkey account's keystore change and pay its fee, for example a wallet provider paying for a new user's first change. The sponsor pays the ordinary fee, under the same base fee and burn as any transaction, so sponsorship is no way around the fee market, and the change still needs the account's own passkey approvals.

4.3 Settlement split

A settled service payment is divided once, by the serving node's mode:

• A private node, reached only through keys its operator issued, keeps the whole payment.
• A public node that validates pays a share to the treasury.
• A public node that does not validate pays a share to the treasury and a share to the RPC provider validating on its behalf.

The shares are set by governance in one policy. Settlement is not a burn channel: nothing in the split is destroyed.

5. Burn

TNZO is burned through channels that track paid use:

Burn fractions are governance parameters. A governance-controlled burn dial can adjust them against published supply targets, within bounded steps.

6. Rewards

Rewards follow paid, verified work only: served units, verified availability and validator duties.

• Validators earn priority fees and rewards for their duties: participation in finalised checkpoints.
• Providers earn the fees their customers pay per completed unit, and rewards for metered, verified service and verified availability.
• Ecosystem rewards pay for verified contributions to the network.
• Each epoch, rewards are matched pro rata to the verified work recorded in it. Provider and ecosystem shares are capped against the paid revenue they settled, and rewards no work matches stay in the rewards pool. The disbursement rate is a governance parameter.

There are no points, airdrops, yield or holding rewards.

7. Staking and bonds

7.1 Staking

Validators stake TNZO as their bond. Stake determines quorum weight in consensus and weight in governance. Staked TNZO is at risk: it earns rewards for work done and is slashed for provable faults.

7.2 Unbonding

Stake and bonds unbond over a period governance sets, 7 days at genesis. During unbonding, the stake no longer earns rewards or carries quorum weight, but it remains slashable for faults committed while it was bonded. A validator cannot escape a penalty by exiting.

Voting weight is taken as a snapshot when a proposal is created, so stake cannot be counted twice by moving it between accounts during a vote.

7.3 Admission

Validator admission is permissionless. Any operator with a TPM 2.0 machine and the required bond can register a validator with its hardware-rooted key, and is admitted at the next epoch boundary. See Tenzro DAG Consensus.

8. Slashing

Slashing burns the offender's bond. It is carried on the ledger as evidence that anyone can submit and every node verifies the same way.

Slashed TNZO is burned. It is paid to no participant, so nothing rewards provoking or fabricating a slash.

9. Governance

9.1 The Tenzro Foundation

The Tenzro Foundation is a non-profit and the steward of the network. It maintains the protocol and network primitives under Apache 2.0, the repositories, documentation and tools, distributes and markets network resources, and is the governing body for TNZO.

9.2 On-chain governance

Protocol parameters are set by on-chain governance:

• Voting is stake-weighted, with dampening at the top so a single very large stake cannot dominate.
• Stakers can delegate their votes.
• Each proposal class has its own quorum, voting window and timelock, matched to its risk.

The governance surface is the same whether the voter is a person, a delegated agent or an autonomous agent. Every vote is signed with the voter's hardware-rooted key.

9.3 Treasury

The treasury receives its share of settlements and any base-fee share governance directs to it. Outflows fund grants, ecosystem incentives, infrastructure and operations, and are approved through governance.

The treasury also pays for network duties: chain work that anyone may do, paid to the first sender whose proof the chain verifies. Settlement reconciliation is one: each epoch the chain opens a duty for every bridge route with a settlement lock, funded by the treasury at the reward governance sets (settlement.reconciliation_reward). An unclaimed duty returns its funds to the treasury when it expires. Duty rewards, like every other economic parameter, are set and changed by governance. The treasury balance is on the ledger and anyone can query it.

10. Distribution

The genesis allocation, including the rewards pool, is recorded in the genesis block and is public. Participants earn TNZO through verified work for the network: running validators and RPC endpoints, serving models, compute, storage and attested execution, carrying out network duties, building applications and tools, and contributing to the protocol through Foundation grants. Accounts are funded by transfer: any account can send TNZO to another account's address.

11. Properties

• Dollar-priced fees. Fees are priced in dollars and paid in stablecoins or TNZO.
• Supply follows usage. Fees burn TNZO, and rewards enter circulation only against verified work.
• Rewards for work. Served units, verified availability and validator duties earn rewards; there are no points, airdrops, yield or holding rewards.
• Accountable security. Every role that matters is bonded, every provable fault burns the bond, and bonds cannot leave before the 7-day unbonding completes.
• One unit for the protocol. TNZO pays all fees and settlement, while buyers may still pay for services in stablecoins.

12. Conclusion

TNZO is the unit for fees, settlement, security, rewards for verified work and governance on Tenzro, with a supply that follows usage. For hands-on detail, see Token economics, Governance and Slashing, or visit TNZO.