Subsidies

➭ Subsidization is the rewarding of participants through a native asset.

While Nested Chains may be automatically subsidized by the protocol through new mint — Canopy comes pre-built with manual Subsidization functionality.

This means that anyone from community leaders to average patrons may donate tokens on the Security Root to ensure participants are appropriately compensated for their efforts.

Competitive Fee Market

➭ Similar to *Gas Fees* in Ethereum, additional subsidization may be the norm at Canopy's maturity.

Specifically, the economic barrier for a chain to get security services on a root may be dictated by the market conditions of the Security Root at any given time.

However, unlike Ethereum, the risk of Security Root monopoly is greatly diminished through the Peer-to-Peer architecture of Canopy, where each chain is expected to offer Security Root functionality. This allows the market to naturally ebb and flow through cycles of high and low demand.

Life After Minting

➭ Subsidies allow the system to continue functioning after supply inflation ends.

The community can simply patronize the chains it wishes to support through subsidization, effectively replacing the mint incentive once the final halvening occurs.

This future vision takes great inspiration from Bitcoin’s sustainability model, promoting an ecosystem where long-term security is maintained through voluntary economic participation rather than perpetual inflation.