The Datamine Network features a highly optimized decentralized monetary system built around the relationship between its foundation token, DAM, and its utility token, FLUX. By locking DAM, users can dynamically mint FLUX on-chain. ## Inside the Dynamic APY Mechanism The system relies on a "Dynamic APY" model to distribute rewards. When you lock DAM on Layer 1 (Ethereum), you begin minting FLUX at regular intervals of approximately 13 seconds, matching the blockchain's block times. The baseline APY starts at approximately 31% and can scale up to 313%. To achieve the highest tier of rewards, validators can choose to burn FLUX. Burning tokens reduces the circulating supply and directly boosts the individual validator's yield. This creates a strong incentive structure where the destruction of utility tokens fuels long-term passive yield. ## Achieving Deflationary Equilibrium Due to the system's aggressive incentivized burning, the overall ecosystem has achieved a negative inflation rate of -10%. This means more FLUX is being burnt by validators to boost their yields than is being minted into active circulation. Unlike traditional fiat or standard Proof of Stake (PoS) systems where inflation dilutes holders, Datamine utilizes this "proof-of-burn" pattern to balance supply expansion with voluntary, permanent token destruction.