Security and Incentives

Traditional exchanges ask traders to trust their operations. Yamata replaces trust with cryptographic guarantees and economic incentives that make malicious behavior more expensive than honest operati

A) TRUST ARCHITECTURE

Our optimistic security model assumes honest operation but verifies everything. Every trade, every order, every execution is subject to permissionless validation by the Guardian Network. Like a decentralized audit system, it ensures transparency without sacrificing performance.

The Guardian Network provides continuous oversight through multiple layers:

• Real-time monitoring of order execution

• Verification of epoch commitments

• Challenge capabilities for any discrepancy

• Economic penalties for misbehavior

This creates a system that's "unable to be evil"—not through blind trust, but through mathematical guarantees and aligned incentives.

B) ECONOMIC MODEL

Our fee structure aligns interests across all participants:

• Maker/taker model rewards liquidity provision

• Volume-based tiers encourage active trading

• Clear fee distribution creates predictable economics

Transaction fees flow through a carefully designed distribution:

• 10% to Guardian Nodes for validation

• 10% to Yamata for operations

• 20% to Future Reward Pool

• 60% to Treasury (locked for 14 days)

Guardian Nodes earn through multiple streams:

• Base rewards for active validation

• Share of transaction fees

• Substantial rewards for catching discrepancies

• Opportunity to claim

• Yamata's locked revenue on successful challenges

C) REPUTATION SYSTEM

Guardian Node effectiveness is tracked through a dynamic reputation system:

• All nodes start with 100 base points

• Successful validations increase score

• Failed challenges reduce points Inactivity causes score decay

Reputation directly impacts operations:

• Higher scores mean lower slashing risk (5-100% range)

• Better reputation enables longer validation windows

• Reward multipliers scale with reputation

• Exclusion periods for low scores (3 hours to 7 days)

This comprehensive security model creates a self-reinforcing cycle: Guardian Nodes are incentivized to catch manipulation, while Yamata is incentivized to operate honestly to retain revenue. The result is a system where security emerges from economic rationality rather than trust.