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Sundial introduces no new token. The Sundial L2’s fees, bonds and rewards are paid in the native asset of the settlement L1, which is ADA on Cardano. This page explains who pays what, who earns what, and why those amounts keep the rollup secure.

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Core principle: no new token

Most L2 networks launch a token to pay operators and fund governance. Sundial doesn’t. There is no issuance schedule, no emissions and no token allocation. Operators are paid from the fees that users pay, and security rests on bonds posted in an existing asset.

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Transaction fees

Every L2 transaction pays a fee. The minimum follows Cardano’s formula with the same constants:
Fees are the operators’ revenue. They pay for assembling blocks, publishing block data, committing headers to L1 and holding the latest confirmed UTXO set.

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Why costs fall as usage grows

An L1 commitment costs the operator a fixed fee, however many L2 transactions the block holds. The more transactions in a block, the smaller the L1 cost each one carries. In the whitepaper’s benchmark runs, the L1 cost per L2 transaction fell from 944 lovelace with small blocks to 17 lovelace with full ones. See Performance.

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Operator bonds

To become an operator, you post a bond of required_bond in ADA. The bond backs your promise to commit only valid blocks.
  • The bond stays locked while you are active.
  • After you retire, you recover it once every block you committed has matured.
  • If a block you committed is proven fraudulent, you forfeit it.
For a network that secures value, the design range for the bond is 50,000 to 200,000 ADA.

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Slashing

A forfeited bond is split in two: The two always sum to the full bond. Operators can also lose part of their bond for inactivity. An operator that repeatedly fails to commit blocks during its shifts, or ignores user events, is retired and pays inactivity_slashing_penalty.

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Watcher incentives

Anyone can check committed blocks and prove fraud. A watcher needs no bond and no registration. A successful proof pays the watcher fraud_prover_reward. A watcher’s costs are the L1 fees for the proof’s transactions and the infrastructure to read and replay blocks. See Run a watcher.

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Settlement fees

When an operator finishes processing the deposits, withdrawals and transaction orders of a merged block, it can claim that settlement as resolved. Once the claim matures unchallenged, the operator recovers the ADA held in the settlement UTXO and some fees for the work. A false claim is slashable like a fraudulent block.

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Why these amounts keep the rollup secure

The security argument needs three amounts to be set well:
  • The bond is large enough to deter fraud. A block proven invalid never enters the confirmed state, so fraud earns nothing to set against the lost bond.
  • The reward is large enough to keep watchers looking. Checking blocks has to be worth doing even when fraud is rare.
  • The reduced bond in an emergency still covers the reward. While the escape hatch is in force, new operators can register with a smaller bond. That bond must stay above slashing_penalty, so a slashed operator still leaves a reward for the prover.
Protocol parameters lists every parameter and its design range. Security model explains the threats behind them.

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The yield products

The fees and bonds above belong to the Sundial L2. The Bitcoin yield products have their own economics, in BTC:
  • In Dawn, the Yield Provider pays you a fixed return in BTC, and the dashboard shows any protocol fee before you sign.
  • In Solstice, yield shows up as a rising Claim Ratio on your receipt token.