Emission Mechanisms

Mechanisms that mint AIR, increasing total supply

Staking Rewards

Additional AIR is distributed every epoch through Pulse AirDAO staking rewards. These staking rewards are generated from the excess reserves the Pulse AirDAO treasury accumulates from selling bonds. A portion of these excess reserves are distributed back to stakers as sAIR staking rewards. 1 sAIR is redeemable for 1 AIR.

Pulse AirDAO's staking rewards rate is set by Pulse AirDAO governance. Note that the staking reward rate that a user receives for their staked AIR is equal to the Pulse Air DAO reward rate / % of circulating supply staked.

Bonding

AIR is also minted and distributed when users bond assets to Pulse AirDAO. An explanation of Pulse AirDAO bonding mechanism can be found here.

In addition to the amount of AIR minted for the bonder, an extra 30% of the bond value is minted for the DAO wallet to fund operations. For example, if a user bonds assets valued at 10 AIR, 10 AIR will be minted for the bonder and 3 AIR will be minted for the DAO.

pAIR Redemption

Pulse AirDAO distributed pAIR to individuals and organizations committed to helping Pulse AirDAO become a long-term success. pAIR is vested based on supply share. For example, the team’s supply share is vested at 7.8%, meaning when the protocol has a supply of 1 million AIR, 78,000 pAIR can be redeemed by the team.

• Team: 330m pAIR, and 7.8% supply share

• Project stakeholders: 70m pAIR, and 3.5% supply share

• Advisors: 50m pAIR, and 1% supply share

• OlympusDAO: 70m pAIR, and 3.5% supply share

• Pulse AirDAO community: 480m pAIR (no supply share)

pAIR is not the same as AIR, aAIR or alAIR. AIR, aAIR, and alAIR are all backed by 1 BCT. In order to mint any of these tokens, 1 BCT must be locked in the treasury. There are no underlying BCTs locked in the treasury to underpin the distributed pAIR supply. To redeem pAIR, holders will be responsible for delivering BCTs to the treasury themselves, 1 BCT for each claimed pAIR. By limiting pAIR to a % supply share and requiring holders to deliver BCTs to the treasury themselves, pAIR ensures that stakeholders, partners, core-members, and community contributors are all focused on the same goal: growing our carbon-backed treasury for long-term success.

Maximum Supply?

Since each AIR must be backed by at least 1 tonne of tokenized carbon offsets held in reserves by the treasury, the maximum supply of AIR at any given time is limited to the number of tokenized carbon tonnes held in the treasury’s reserves.

However, this total can grow over time as more offsets are delivered to the treasury via bonds or pAIR redemption. So, the practical limit on the number of tonnes that can be brought into the Air treasury at any point in time is the total offset tonnage that has been bridged on-chain thus far.

That said, assuming no further bridging, a larger and larger percentage of on-chain offsets would eventually be absorbed into the Air treasury, which would push up on-chain offset prices and incentivize more offsets to be bridged to capture any price difference with the off-chain offset market.

The true limit on the total supply of AIR is the total number of outstanding verified carbon offsets in existence - as of the time of writing this is about 500 million tonnes, but more offsets can be issued by registries like Verra as new offsetting projects complete their verification and issuance process.

Thus, there is no fixed upper bound on the total supply of AIR - as long as more offsets are being generated, bridged, and bonded to the treasury, AIR supply can continue to grow.