# Security and Incentives **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. --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://paper.yamata.io/security-and-incentives.md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.