Settlement & Fees (EDM Flow)

Universal rule: No EDM, no action. Every state-changing transaction—mints, conversions, listings, trades, retirements, milestone releases—requires $EDM. EDM is the gas, settlement currency, and deflationary mechanism of EDMA.

How it Works

1

Transaction initiation

• A producer, corporate, or trader initiates an action: e.g., converting 100 ETT into 1 CLE, listing a CLE on the marketplace, or purchasing a Carbon Credit NFT.

2

Gas & protocol fees (two distinct costs)

• Network gas: paid in EDM to execute the transaction on EDMA L2 (covers computation/sequencing).

• Protocol fee (where applicable): charged in EDM on settlement actions (not on proof creation).

  • Energy & Carbon trades/retirements: 4% total (2% buyer + 2% seller).

  • Commodity milestones: 0.5% per tranche, capped (≤$1M: $5k; $1–5M: $12.5k; >$5M: $25k).

Proof mints & conversions: gas-minimal only (no protocol fee). Example: ETT mint, EMT mint, Carbon NFT mint, 100 ETT → 1 MWh Energy NFT incur gas only; value-realizing moves (trade/retire/release) incur protocol fees.

3

Automatic Burn mechanism

• The contract automatically splits the collected EDM.

• 50% is burned on-chain, permanently reducing supply.

• The remaining 50% is distributed to liquidity pools, staking rewards, and ecosystem treasury functions that keep the network running.

4

Finality & Fail-safes

• A transaction finalizes only after required EDM gas and protocol fees are paid and processed.

• Insufficient EDM → revert. No conversion/trade/retirement/payout occurs; proofs remain intact.

• Revocations or missing attestations cause fail-safe reverts (no mint / no settle) until rectified.

5

Transparency & audit

• Fee events (amounts, burn split, treasury receipt) and settlement lineage are emitted on-chain.

• Evidence → attestation → mint → settlement → burn is anchored to Ethereum (L1) for immutable audit trails.

Example: Corporate Purchase of Renewable Energy

1. A corporate buyer wants to purchase 1 REC (representing 1 MWh of renewable energy) from a solar producer.

2. The trade is executed on Edma’s marketplace at a price of $100.

3. The smart contract applies the 2% + 2% fee rule:

   • Buyer pays $100 for the CLE + $2 fee in EDM.

   • Seller receives $98 for the CLE but also pays a $2 fee in EDM.

   • Total fees collected = $4 worth of EDM.

4. The contract automatically burns $2 worth of EDM (50%).

5. The remaining $2 in EDM is distributed to the ecosystem (liquidity incentives, staking pools, treasury).

6. The corporate now holds 1 CLE, fully backed by ETT evidence. The solar producer has liquid cash immediately, while EDM supply has been permanently reduced.

Example 2: Carbon Market — Carbon Credit NFT Retirement

• A corporate retires 100 Carbon Credit NFTs, each representing 1 ton of CO₂ reduction.

• Retirement value: $2,500 total.

• Fees:

  • Corporate pays $2,500 + $50 in EDM (2%).

  • Retirement contract applies the burn on this $50.

• Distribution:

  • $25 worth of EDM is burned permanently.

  • $25 worth of EDM is allocated to the ecosystem.

• Outcome: the 100 NFTs are marked as retired on-chain with a public audit trail, the corporate can claim verified emissions reduction, and EDM supply contracts again.

Example 3: Commodity Trading — Milestone Settlement

• Contract value: $1,000,000 (copper shipment)

• Milestones: 30% On Board, 50% Customs Cleared, 20% Delivered

• Proofs: Each milestone mints an EMT (gas-only on EDMA L2) after verification from port/customs/warehouse/assay sources.

Settlement & fees (EDM at 0.5% per milestone tranche):

• On Board — tranche $300,000 → fee 0.5% = $1,500 → $750 burned, $750 to treasury

• Customs Cleared — tranche $500,000 → fee 0.5% = $2,500 → $1,250 burned, $1,250 to treasury

• Delivered — tranche $200,000 → fee 0.5% = $1,000 → $500 burned, $500 to treasury

Totals: fees $5,000 → $2,500 burned, $2,500 to treasury

(All fees are below the ≤$1M tranche cap of $5,000; staking/volume rebates—if used—apply only to the treasury half.)

Result: the supplier receives staged payments strictly on verified proof, the buyer pays only when reality is logged, and EDM supply contracts at each release.

Design intent (why this structure)

• Aligns incentives: only value-realizing actions pay protocol fees; data truth stays cheap.

• Deflationary by design: more verified settlement ⇒ more EDM burned; supply tightens with adoption.

• Predictable ops: fees are coded, caps published; burn is algorithmic, not discretionary

Bottom line: EDM is the lifeblood of settlement. Gas runs the network, protocol fees price the rail, and burn hard-wires scarcity as verified GMV grows.