> ## Documentation Index
> Fetch the complete documentation index at: https://docs.cowboy.lat/llms.txt
> Use this file to discover all available pages before exploring further.

# Value Flows

> How value flows through the Cowboy ecosystem

## Introduction

Understanding where fees go, how rewards are distributed, and how value accrues is crucial for all Cowboy participants. This page visualizes and explains the **complete value flow** in the ecosystem.

<Tip>
  Basefee for Cycles and Cells is burned (CIP‑3); tips go to the validator (block proposer). Off‑chain job fees are paid in CBY separately and are market‑priced (CIP‑2/3).
</Tip>

***

## High-Level Flow (Conceptual)

```mermaid theme={null}
graph TB
    User[👤 User] -->|Pays Gas| L1[On-Chain]
    User -->|Pays Job Fee| Runner[🤖 Runner Network]
    
    L1 -->|Basefee Burn| Burn[🔥 Burn]
    L1 -->|Tips| Validator[⚡ Validator]
    
    Burn -.->|Supply ↓| CBYValue[💎 CBY Value]
```

***

## Per-Transaction Flow (Normative Parts)

### On-Chain Transaction

**When a user submits a transaction**:

```text theme={null}
# CIP‑3 (dual meters), per resource x ∈ [Cycles, Cells]
basefee_component_x = usage_x × basefee_x

effective_tip_rate_x = min(tip_per_x, max_fee_per_x − basefee_x)
tip_component_x = usage_x × effective_tip_rate_x

Total fee = Σ_x (basefee_component_x + tip_component_x)
# Basefee components are burned; tip components go to the validator
```

**Fee breakdown**:

1. **Basefee**:
   * 100% burned (CIP‑3)

2. **Tip**:
   * Paid to the validator (block proposer) (CIP‑3)

3. **Protocol Fees**:
   * Any treasury/fee allocations are governance/implementation‑specific (non‑normative)

***

## Per-Block Flow (Conceptual)

```mermaid theme={null}
sequenceDiagram
    participant V as Validator
    participant B as Block
    participant U as Users
    
    U->>B: Transactions (fees: basefee + tip)
    V->>B: Construct Block
    B->>Burn: Burn basefee (100%)
    B-->>V: Pay tips
```

***

## Off-Chain Compute Flow (CIP‑2)

```mermaid theme={null}
sequenceDiagram
    participant A as Actor
    participant D as Dispatcher
    participant R as Runner
    
    A->>D: submit_task(payment_per_runner)
    D->>R: Deterministic selection (VRF snapshot)
    R->>R: Execute job off-chain
    R->>D: submit_result(result, proof)
    D->>A: Deferred callback (CIP-1)
    A->>D: consume_result(task_id, winner)
    Note over D: Trigger payment to selected result(s)
```

* Payments are market‑priced and denominated in CBY per runner (CIP‑2/3).

***

## Scope Notes

* Issuance/inflation schedules and validator reward splits are governance‑defined and out of scope for this document. Any numerical examples must be specified via separate proposals.
* Direct numerical comparisons to other protocols’ tokenomics are out of scope; Cowboy’s normative mechanisms here are the dual meters and dual basefee burn (CIP‑3).

***

## Interactive Flow Visualization

<Tabs>
  <Tab title="User Transaction">
    ```mermaid theme={null}
    flowchart LR
        U[User] -->|Pays Gas| L[On-Chain]
        L -->|Basefee| B[🔥 Burn]
        L -->|Tips| V[Validator]
    ```
  </Tab>

  <Tab title="Runner Job">
    ```mermaid theme={null}
    flowchart LR
        A[Actor] -->|"Job Payment (CBY)"| R[Runner]
        R -->|Submit Result| D[Dispatcher]
        D -->|Deferred Callback| A
    ```
  </Tab>
</Tabs>

***

## Summary

* Basefee (Cycles/Cells) is burned; tips go to the validator (CIP‑3).
* Off‑chain job payments are market‑priced in CBY and handled separately (CIP‑2/3).
* Issuance/treasury specifics are governance‑defined (scope notes).

***

## Further Reading

* [Tokenomics](/economics/tokenomics)
* [Fee Model Overview](/architecture/fees/overview)
* [Off-Chain Lifecycle](/architecture/offchain/lifecycle)
* [CIP-2](/cips/cip-2)
* [CIP-3](/cips/cip-3)

***