4.2 How the Halving Works

BitNet’s halving mechanism is a key part of its deflationary monetary policy, designed to gradually reduce the number of new tokens introduced into circulation over time. Here's how it works:

Block Rewards and Timing

BitNet's economic design begins with a fixed block reward distributed to miners who validate and secure the network by processing transactions. This reward is paid in BitNet's native token, BNC. At network launch, the initial reward is set at 50,000 BNC per block.

Blocks on the BitNet network are produced approximately every 10 minutes. This means that, over time, a substantial number of tokens are introduced into circulation—unless supply is regulated. To manage this, BitNet implements a halving event that occurs every 42 million blocks, which is roughly every four years based on the average block production time.

These halving events reduce the rate at which new BNC tokens are created, gradually tightening the supply and aligning with a long-term deflationary model designed to preserve value and encourage early participation.

Automatic Adjustment

The halving process is fully automated and embedded into the core protocol. It requires no external governance, decisions, or upgrades—ensuring consistency and predictability.

When the total number of blocks reaches a halving threshold (e.g., 42 million, 84 million, etc.), the block reward is instantly reduced by 50%. This reduction happens in real-time at the moment the milestone block is mined.

Here is a sample halving schedule:

Halving Event	Block Reward (BNC)
Genesis (Launch)	50,000 BNC
1st Halving	25,000 BNC
2nd Halving	12,500 BNC
3rd Halving	6,250 BNC
4th Halving	3,125 BNC
5th Halving	1,562.5 BNC
........

This schedule gradually reduces rewards until they become negligible or reach a predetermined minimum value. This predictable and controlled issuance model encourages early adoption, long-term holding and contributes to a stable and secure network economy.