Cyber

h based economy

Updated Nov 8, 20253 min read

H-Based Economy Whitepaper

  • Overview

    We propose a dual-token economic system with two distinct roles:

  • CYB: the value anchor, designed to be scarce, stable, and accrue long-term value.

  • H: the liquidity engine, designed for high velocity, stability in price, and functional utility.

    The system balances scarcity (CYB) and liquidity (H) through adaptive monetary policy, guided by a premium/discount mechanism.

  • Core Principles

    1. CYB benefits from stability, H benefits from activity.
    2. Scarcity and liquidity are opposing forces — we assign one to each token to avoid conflict.
    3. No zero-sum wins — policy ensures cooperation between CYB and H holders.
    4. Adaptive responses to market conditions based on a single macro signal: premium = (H price / structural D/E ratio).

  • Key Metrics

  • Price (p): market rate of H in CYB.

  • Structural D/E (d): H supply / CYB staked (nominal units).

  • Premium (prem): p / d.

  • Velocity (vel): proportion of H used for gas per period.

  • Spread (spr): average market bid-ask spread for H pairs.

  • Monetary Policy Mechanisms

  • 1. Adaptive Gas-H Allocation

    Gas fees paid in H are split into three buckets:

  • CYB Buyback/Burn: funds scarcity of CYB.

  • H-holder Rewards: tenure yield, spend rebates, LP incentives.

  • Liquidity Safety: PD/MM subsidies, circuit breakers.

    Adaptive Split:

  • Premium > 1 (H scarce): More to H rewards, less to CYB buybacks.

  • Premium ~ 1 (Balanced): Even split.

  • Premium < 1 (H cheap): More to CYB buybacks, less to H rewards.

  • 2. Optional Minting of H

    Stakers may choose whether to mint H upon staking CYB. This self-selection prevents oversupply and allows the market to adjust naturally.

  • Mint rebates when H scarce.

  • Mint fees when H abundant.

  • 3. Continuous Tenure Reward

    Reward long-term H holding in CYB at all times.

  • Base reward always active.

  • Countercyclical multiplier increases rewards when H is abundant.

  • Rewards require H to be staked or escrowed.

  • 4. Spend Incentives

    Encourage gas spending to control liquidity:

  • Rebates higher when H is cheap to soak up excess liquidity.

  • Rebates lower or zero when H is scarce.

  • 5. Soft Costs Without Burning

    No H burn for scarcity. Instead:

  • Micro-fees/spreads on mint/redeem recycled to rewards and liquidity programs.

  • Priority rules favor long-tenured H.

  • 6. Liquidity Infrastructure

  • Protocol market maker (PHMM) funded by liquidity bucket.

  • Primary dealer (PD) program with obligations and rewards.

  • Circuit breakers and redemption smoothing to avoid liquidity spirals.

  • Premium/Discount Feedback Loop

    1. Measure p, d, prem.
    2. Adjust gas-H split, mint fees/rebates, and spend incentives.
    3. Balance CYB scarcity and H liquidity adaptively.

  • Advantages of the Model

  • Keeps CYB scarce without starving H.

  • Maintains H liquidity and price stability.

  • Rewards both long-term holding and high turnover in a countercyclical way.

  • Allows self-regulating debt issuance without central governance micro-management.

  • Governance Considerations

  • Parameters (bands, fees, splits) change slowly with rate limits.

  • Hard-coded circuit breakers for stability.

  • Policy transparent and rule-based to avoid manipulation.

  • Conclusion

    This dual-token system creates a cooperative game between value and liquidity. By separating scarcity (CYB) and utility (H) and using premium/discount signals to adapt rewards and buybacks, the protocol maintains long-term value growth while keeping the economy liquid and functional.

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