> For the complete documentation index, see [llms.txt](https://bitcoin-scaling-labs-docs.gitbook.io/ipc-btc-scaling-docs/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://bitcoin-scaling-labs-docs.gitbook.io/ipc-btc-scaling-docs/overview/ipc-btc-rewards.md).
# IPC-BTC rewards
### Core principle
Staking in a Bitcoin-IPC subnet is to Bitcoin-IPC what Proof-of-Work mining is to Bitcoin. A miner secures Bitcoin by committing real-world resources — energy and hardware; a Bitcoin-IPC staker commits real economic value by locking up **native L1 Bitcoin** as collateral in a subnet. For this, stakers earn the protocol's reward token, **IPC-BTC**, regardless of which subnet their stake sits on. Uniquely, rewards do not stop at validators: users who send **cross-subnet transfers** and users who deposit BTC in a subnet also earn IPC-BTC, so the system rewards both the security that locked BTC provides and the real usage that transfer activity represents.
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### Fair launch
IPC-BTC has no pre-allocation: no team tokens, no investor allocations, no insider head start. The only way to obtain it is to participate — stake L1 Bitcoin or move value across the network — and earn alongside everyone else. This is a deliberate alignment with Bitcoin's own ethos: credibility earned through transparency rather than granted by allocation.
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### Emission schedule
IPC-BTC is hard-capped and deflationary, with emission mirroring Bitcoin's. Issuance runs in **epochs of \~210,000 Bitcoin blocks (\~4 years)**, and the reward **halves every epoch**. On the illustrative parameters used so far — a **42,000,000** IPC-BTC cap — the first epoch mints 21,000,000 (50% of supply), the second 10,500,000 (25%), and so on, converging to the cap. (All figures here are examples, to be finalized through community discussion.)
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### Snapshots and distribution
Each epoch is divided into **snapshots of 1,000 Bitcoin blocks (\~1 week)** — 210 snapshots per epoch — and a fixed allocation is distributed at the close of every snapshot. In the first epoch that is **100,000 IPC-BTC per snapshot**, split **70,000 to validators** (in proportion to BTC staked) and **30,000 to cross-subnet transfer users** (in proportion to transfer volume). A validator must remain staked for the *entire* snapshot to qualify, and every share is strictly proportional to measured contribution. The result behaves like Bitcoin's difficulty adjustment: automatic, objective, and anchored to the Bitcoin chain.
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### Minting and verifiability
Every input needed for the rewards allocation lives on Bitcoin Mainnet — who staked how much in which subnet, and the volume of cross-subnet transfers — so the amount of IPC-BTC each participant is due is fully public and computable by anyone, with no trust required. This is what lets each subnet mint the IPC-BTC it owes directly: a subnet acts as its own issuer, deriving every entitlement from the same public Bitcoin data. The firewall property keeps this safe across the network — if a malicious subnet mints, or tries to send out, more IPC-BTC than it is legitimately due, the receiving subnet independently recomputes the entitlement from Bitcoin and rejects the excess. No subnet has to trust another's accounting.
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### The two tokens of a subnet
Every Bitcoin-IPC subnet has two tokens by default: **wBTC**, a wrapped representation of BTC that any user obtains by depositing BTC from L1; and **IPC-BTC**, the reward token, recognized in all subnets and natively transferable between them.
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### Implementation status (MVP)
The current testnet build is a deliberately simplified version of the above:
* **Minting via a dedicated Emission Chain.** Rather than each subnet minting what it owes, the MVP uses a single special-purpose subnet — the *Emission Chain* — whose validators monitor Bitcoin and mint IPC-BTC for the network. Long term this role dissolves into every subnet issuing its own rewards, which the public Bitcoin data and the firewall property make trustless.
* **Validator rewards only.** Minting is proportional to staked collateral (the minimum a validator held across the snapshot); the 30% cross-subnet-transfer share is designed but not yet implemented**.**
* **Flat emission, no halving or cap yet.** The reward is a placeholder constant (1,000 IPC-BTC/snapshot in code; the [demo](https://www.youtube.com/watch?v=UngzD2hL2Mo) used 10-block snapshots) rather than the 100,000-with-halving schedule.
* IPC-BTC is a standard ERC-20 (18 decimals), minted by the system at each snapshot — distinct from the subnet's wBTC.
* All numeric parameters above are illustrative and intended to be finalized through community discussion.