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Token Lifecycle Model

Deterministic State Machine for Incentive Units

Purpose

The Token Lifecycle Model formalizes incentive unit state transitions as bounded, timestamped, ledger-validated events. No incentive unit may change state outside this model.

This applies to:

Governance weight units

Contribution credits

Reputation signals

Treasury-linked units

All units must follow this lifecycle grammar.

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I. State Definitions

Each incentive unit exists in one of the following states:

Issued

Unit created but not yet active.

Must reference issuance source (proposal, milestone, algorithmic trigger).

Vesting (Optional)

Time-bound maturation phase.

Governance weight = 0 during vesting unless explicitly configured.

Active

Fully participating in governance weight or treasury logic.

Decayed

Reduced governance influence due to inactivity or time decay.

Suspended

Temporarily disabled due to investigation, rule violation, or governance freeze.

Slashed

Reduced via enforcement mechanism.

Retired / Burned / Expired

Permanently removed from circulation.

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II. Deterministic Transition Rules

Issued → Vesting

Trigger:

Issuance event logged

Vesting duration > 0

Issued → Active

Trigger:

Vesting duration = 0

Ledger confirmation complete

Vesting → Active

Trigger:

current_time ≥ issued_at + vesting_duration

Active → Decayed

Trigger:

last_activity_timestamp > inactivity_threshold

Decay rate applied per configured multiplier

Decayed → Active

Trigger:

Verified participation event

Activity threshold met

Active → Suspended

Trigger:

Conflict Resolution decision

Emergency override

Risk escalation threshold exceeded

Suspended → Active

Trigger:

Resolution clearance

Appeal outcome

Active / Decayed → Slashed

Trigger:

Governance-approved penalty decision

Threshold met per enforcement module

Any State → Retired

Trigger:

Expiry reached

Governance decision to burn

Voluntary surrender

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III. Hard Constraints

No unit may skip states.

All transitions require ledger entry.

Slashing must reference proposal ID.

Suspension requires review body.

Expiry must be deterministic (timestamp-based).

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IV. Governance Weight Computation Hook

At each state transition, the system recalculates:

Effective Weight = (quantity × state_multiplier × activity_factor × time_factor) − concentration_adjustment

State multipliers example:

Issued: 0

Vesting: 0

Active: 1.0

Decayed: <1.0

Suspended: 0

Slashed: adjusted quantity

Retired: 0

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Structural Function

The lifecycle model ensures:

No indefinite passive influence

Time-bound participation relevance

Auditability

Enforcement integrity

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