# Vela Palina — Retroactive Royalty Layer

Vela Palina builds on the Capsule + FlowDAG objects defined in [5 Capsules & FlowDAG — The Network’s Long-Term Memory.](https://vela-network.gitbook.io/vela-network/capsules-and-flowdag-the-networks-long-term-memory)

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**1 Purpose**

Vela Palina is a value-tracing economic fabric that converts the provenance proof that FlowDAG already provides into an automatic payment rail. Whenever value lands at any leaf agent, a programmable share streams backward through every Capsule that enabled the outcome, rewarding upstream developers, data owners and prompt engineers, no off-chain licensing deals required.

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**2 Key primitives**

| Primitive     | What it does                                                                                                                       | Stored where      |
| ------------- | ---------------------------------------------------------------------------------------------------------------------------------- | ----------------- |
| cToken        | Lightweight ERC-6909 token minted once per Capsule; represents its perpetual royalty share.                                        | On-chain          |
| RetroStream   | Smart-contract function that routes payments backward through the FlowDAG either push (sender pays gas) or pull (receiver claims). | On-chain splitter |
| Slashing bond | Collateral posted by each Capsule author; forfeited if hidden parents are later proven.                                            | On-chain vault    |
| Weight        | Integer attached to a Capsule (default = 1) to express unequal royalty splits.                                                     | Capsule metadata  |

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**3 Workflow example**

1. **Publish**\
   Alice trains a niche sentiment model → mints Capsule #01, stakes a bond, receives 1 cToken (weight = 1).
2. **Compose**\
   Bob builds a trading agent that depends on #01 → mints Capsule #02 (weight = 3) which references parentCapsuleID #01.
3. **Monetise**\
   Carol integrates Bob’s agent into a SaaS, earns 10,000 USDC in fees.
4. **Settle**\
   SaaS backend calls RetroStream.settle(Capsule #02, 10,000)\
   Contract streams automatically:

* Carol → 6,000 USDC
* Bob → 3,000 USDC
* Alice → 1,000 USDC

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**4 Why Palina matters**

| Benefit                                                              | For whom                            |
| -------------------------------------------------------------------- | ----------------------------------- |
| Perpetual royalties without manual deals                             | Upstream developers & data curators |
| Composable licensing by hash, not paperwork                          | Agent builders & startups           |
| Network-effect moat: the bigger the FlowDAG, the harder to fork away | Entire Vela ecosystem               |
| Hard, data-driven reputation: value flow doubles as a ranking signal | Indexers & discovery tools          |

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**5 Comparison to existing approaches**

| Aspect           | Traditional royalty standards | Vela Palina                       |
| ---------------- | ----------------------------- | --------------------------------- |
| Split depth      | One hop (e.g., ERC-2981)      | Unlimited hops along a DAG        |
| Payment timing   | Manual or periodic            | Streams in real time              |
| Dependency proof | Off-chain agreements          | Cryptographic Capsule lineage     |
| Fraud deterrence | None                          | Slashing bonds for hidden parents |

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**6 Risks & safeguards**

| Risk                | Mitigation                                                                                 |
| ------------------- | ------------------------------------------------------------------------------------------ |
| Omitted dependency  | Any peer can present proof → offending Capsule’s bond is slashed; flows re-routed.         |
| Sybil Capsules      | Author must stake bond; cTokens carry zero voting weight until Capsule earns positive rep. |
| Hot-wallet griefing | Pull-mode RetroStreams let recipients pay the gas to claim, limiting spam.                 |
| Royalty dust        | Protocol can batch micro-flows below a threshold before distribution.                      |

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**7 Integration timeline**&#x20;

1. **Agent Economy Beta** — Palina contracts deployed on testnet; cTokens & RetroStreams gated behind allow-list.
2. **Audit & bug-bounty** — external review, economic-sim testnet.
3. **Mainnet activation** — DAO vote to turn on continuous issuance of cTokens and live revenue splitting.

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**8 Takeaways**

* Palina does not change the Capsule or FlowDAG schema, it activates them economically.
* Revenue finds its origin automatically, keeping open collaboration profitable even when agents remix each other at machine speed.
* Parameters (weights, decay, bond size) remain adjustable via DAO vote, so the community can tune incentives as real data arrives.
