Quai Network Launches SOAP to Reshape Proof-of-Work Economics

Austin, TX – October 24th, 2025 – Quai Network (QUAI) announces the rollout of its Subsidized Open-market Acquisition Protocol (SOAP), a novel mechanism that transforms conventional Proof-of-Work (PoW) and merge-mining economics into ongoing token buybacks and network security.

Merge-Mining Reinvented
Traditional PoW mining involves pointing hardware at a chain, solving blocks, earning block rewards, and often selling those rewards. This creates continual sell pressure on the mined token. Merge-mining allows a miner to target a “parent” chain and a “child” chain simultaneously, using the same hash work. For instance, miners using Bitcoin hardware earn rewards on Namecoin while mining Bitcoin. In those setups, however, the child chain’s token is paid out and typically sold into the market, weakening the child chain’s economics.

Quai repurposes the merge-mining concept with SOAP. Instead of paying the miner the parent-chain reward directly, SOAP routes 100% of the parent-chain coinbase output to a protocol-controlled address. That address immediately converts the parent chain token into QUAI on the open market and then either burns the purchased QUAI or allocates it into time-locked staking rewards.

How SOAP Operates

• • Miners continue to earn QUAI by mining with QUAI’s algorithm (KAWPOW) as normal.
  • In parallel, hardware from typical parent chains such as SHA-256d (e.g., BCH), Scrypt (e.g., LTC/DOGE) can submit workshares to Quai. Those parent-chain blocks route rewards to the protocol address.
  • The protocol address sells the parent chain reward tokens and purchases QUAI. The purchased QUAI is either burned or time-locked for staking reward distribution.

• The effect: external mining work becomes a source of continuous buy pressure for QUAI rather than a source of token selling pressure.
  
  

Economic Implications for QUAI and Its Network

• By routing parent chain subsidies into open-market QUAI purchases, Quai aims to invert the typical PoW negative-sell-pressure dynamic into a positive buy-pressure dynamic. 
• Initial parameters: The protocol buys QUAI daily and allocates new tokens to lockers; over time, as network hashrate and subsidy inflows scale, the rewards share may taper while absolute buy pressure rises.
• Example: If the protocol buys $20,000 of QUAI per day and locking TVL is US$500,000, APR might approximate 1,460%. As TVL grows toward US$24.3 million with the same daily buy amount, APR compresses to around 30%.
• The mechanism enhances security: Workshares from different algorithms increase block weight and raise the cost of re-org attacks. The system remains liveness-independent of the parent chains. If parent chain participation drops, Quai still operates via its native algorithm.
• TVL estimation calculator for token buybacks can be found at https://soap.qu.ai
  
  

Why This Matters for Proof-of-Work Economics

• SOAP decouples mining subsidy flows from immediate token sell-pressure by redirecting them into protocol-controlled buybacks or burns.
• It broadens hardware participation: Scrypt and SHA-256d miners can participate via workshares and receive QUAI, increasing diversity of security hardware.
• It aligns miner incentives with network health: Rather than extracting value and selling tokens immediately, miners’ parent-chain work contributes to QUAI’s ecosystem strength.
• It potentially creates a virtuous cycle: Subsidy chain flows → QUAI buybacks → price improvement → more hashrate → stronger security → more subsidy flows.
  
  

Deployment Timeline

• SOAP testnet period: October 20–27, 2025.
• Mainnet activation (fork) scheduled for November 10–23, 2025.

For more information, visit Quai Network’s website.

About Quai Network 

Quai Network is reigniting the crypto revolution, with the first decentralized energy dollar on the only scalable and programmable proof-of-work blockchain. Utilizing the innovative Proof-of-Entropy-Minima (PoEM) consensus mechanism, Quai offers unprecedented speed, efficiency, and decentralization.

This post is commissioned by Quai Network and does not serve as a testimonial or endorsement by The Block. This post is for informational purposes only and should not be relied upon as a basis for investment, tax, legal or other advice. You should conduct your own research and consult independent counsel and advisors on the matters discussed within this post. Past performance of any asset is not indicative of future results.