Before getting into Etica details, here is a list of terms & definitions you should know about Etica Protocol

Etica operates with a Period system of 7 days. For each Period the protocol issues Etica (ETI) to reward research. The reward is divided between Researchers (those that submit proposals) and Voters (those that vote on proposals).

In order to incentivize Open source research without intellectual property, Etica issues its own currency (ETI). For about 10 years it will be possible to earn Etica by mining or participating in research reward system. After initial supply has been reached Etica mining will be halted forever leaving the research system as the only way to earn Etica. Once we reach the initial supply of 21 Million ETI, Etica will have a fixed annual inflation rate of 2.618%.
Finally Etica is a crypto currency and as such can be exchanged and transfered between individuals.

Bosoms are a unit of account of Etica protocol that enable to measure the weight and costs of actions in the protocol. For instance in order to submit a proposal a deposit of 10 bosoms is required.

Staking Etica enables to get Bosoms. For instance if you stake 15 Eti your Eti will get 15 Bosoms and your 15 Eti will be locked for 28 days. With your 15 Bosoms you can vote on proposals and submit proposals.

Anyone can add a disease to the protocol provided a cost of 100 ETI that is "burnt", it is sent to the smart contract and locked forever.

Etica promotes oriented research, meaning each Proposal has to be submited in the context of a specific disease. A proposal can be anything and in any format (pdf file, video of experiment, folder with both video and pdf...). It is represented in the network by a hash of the file or folder containing Proposal's content.

It is possible to create multiple chunks for each disease. Chunks enable to have sub categories and to optimize proposals submissions

The Etica ProtocolThreshold is a variable that is used to define which proposals get accepted and which Proposals get rejected. Proposals are accepeted if they gather more approvals than ProtocolThreshold and rejected otherwise. For instance if a proposal is submited when ProtocolThreshold is 64%, then the Proposal will be accepeted only if it gets at least 64.01% approval votes. ProtocolThreshold is updated every 5 weeks and ranges from 45% to 99%.

The Etica RatioTarget is a fixed (it doesn't change) variable that is used to control the ratio of approved proposals and rejected proposals by the network. On Etica RatioTarget is 61.80%, meaning we expect 61.80% of proposals to be accepted. Every 5 week, the protocol compares the actual ratio of accepted proposals and rejected proposals. If there were more than 61.80% accepted proposals, the ProtocolThreshold is proportionally increased to make it harder to get accepeted proposals. If there were less than 61.80% proposals accepeted, the ProtocolThreshold is proportionally decreased to make it easier to get accepted proposals.

The necessity for another currency (EGAZ), is due to the fact Etica has its own blockchain. EGAZ is used to secure the Blockchain, it rewards miners that run Etica fullnodes and mine blocks. EGAZ is also necessary to make transactions as it is the Ethereum's Ether equivalent of Etica Blockchain.

As a consequence each address has 2 balances:

0x2a674CC92dE583590f96135F6259553EaAABeD28                                                                      
                                            

Etica balance: 23.0511141312188 ETI  # Actual currency used within Etica Protocol smart contract

Egaz balance: 203.0511141312188 EGAZ  # Used for Blockchain level

Note that Etica (ETI) is the actual currency of Etica Protocol and it is much more scarce than EGAZ. Etica issuance will be about 2 100 000 ETI every year until 21 Million ETI and then there will be a tail emission of 2.61803% per year. On the contrary EGAZ is issued according to Ethereum's Ether issuance rules.

Etica divides Time into intervals of 7 days called Periods. For each Period the protocol issues a fixed amount of ETI for both reasearch reward and voting reward.

All proposals that are submited within the same Period, compete for the research reward of this Period.
Indeed the Period's research reward is proportionally distributed between the approved proposals of the Period (in proportion to the amount of Bosoms they got).

Every Thursday 00:00 am (UTC) the Protocol changes of Period interval, thus all Proposals submited between Thursday 00:00:00 am and the next Wednesday 11:59:59 pm (UTC) belong to the same Period.

When a proposal is submited, it is voted upon for 3 weeks. Etica token holders can vote to approve or reject the proposal and allocate an amount of Bosoms (staked ETI) to their votes. At this stage the proposal status is set as Pending

This proposal will compete for a part of its Period's research Reward with all proposals that are submited within the same Period.  For instance: if a Period's research reward is 4 000 ETI & a total of 160 000 bosoms were used to approve proposals in this Period. An approved proposal that gathers 16 000 Bosoms of approval votes, will get 10% (16 000 / 160 000) of Period's research reward.
In this example the research reward for this proposal would be 400 ETI (10% of 4000 ETI)

After 3 weeks of voting, the proposal becomes closed to votes and enters revealing stage.
At this moment those who voted on the proposal (for & against included) have one week maximum to reveal their votes.

If they don't, the vote is not taken into account and the amount of (Bosoms) they allocated to the vote becomes unrecoverable.

Once the Protocol reaches at least 5 Periods (5 weeks) beyond the Proposal's Period (the Period when proposal was submited), the proposal will update its final status to rejected or approved depending on the votes. The first person that calls the reward function will trigger the final status update of the proposal. When a person (voter or reseacher) calls the reward function, the function will reward or penalise (slash & optional fee) the person. If nobody claims its reward the proposal's status remains as pending.
The reason why both the persons that voted on good side or wrong side are incentivised to call the reward function is because otherwise the amount of Bosoms they have allocated to their votes becomes unrecoverable. The claiming stage has no deadline, and it is possible to call the reward function at any time once the 5+ Periods has been reached.

A proposal will get a part of the Period's research reward only if it gets approved by the protocol. If a proposal is approved (as definied previously) then the etica address that submited the proposal will be rewarded in proportion of the amount of bosoms the voters have allocated to this proposal.

When a proposal is accepeted the entirety of its research reward is for the etica address that submited the proposal

Total reward (research reward + voting reward) issued every 7 days:

In first era (first year) there will be 4027.393950087164311900 ETI issued every 7 days

In era II (second year) there will be 8054.787900174328623800 ETI issued every 7 days

In era III (third year) there will be 12082.181850261492935800 ETI issued every 7 days

In era IV (fourth year) there will be 16109.575800348657247700 ETI issued every 7 days

In era V (fifth year to tenth year) there will be 20136.9697504358215596 ETI issued every 7 days

After era V: tail emission of 2.61803% per year

Research reward will represent 61.803398875% ETI issued every 7 days:

In first era (first year) there will be 2489.06634724 ETI issued every 7 days for research reward

In era II (second year) there will be 4978.13269448 ETI issued every 7 days for research reward

In era III (third year) there will be 7467.19904172 ETI issued every 7 days for research reward

In era IV (fourth year) there will be 9956.26538896 ETI issued every 7 days for research reward

In era V (fifth year to tenth year) there will be 12445.3317362 ETI issued every 7 days for research reward

After era V: 61.803398875% of tail emission's 2.61803% per year issued for research reward

On week 05/05 2022 -> 12/05 2022. If 3 proposals (Proposal A, B & C) are submited and only 2 proposals (A&C) are accepted then the research reward of the Period will be split in 2 parts. For this example let's say proposal A had 4300 ETI, proposal B 1500 ETI, proposal C 1000 ETI, and Period's research reward is about 2500 ETI
Proposal A research reward will be:
bosoms voted to approve Proposal A / (bosoms to approve A + bosoms to approve C) * Period's reasearch reward
[4300 BOSOMS / (5300 BOSOMS) ] * 2500 ETI = 81.13% of 2500 ETI = 2028.25 ETI
Proposal C research reward will be:
bosoms voted to approve Proposal C / (bosoms to approve A + bosoms to approve C) * Period's reasearch reward
[1000 BOSOMS / (5300 BOSOMS) ] * 2500 ETI = 18.87% of 2500 ETI = 471.75 ETI
Proposal B research reward will be: 0
(Note that Proposal B is rejected although it had more Bosoms voted to approve than propsal C. This means Proposal B had also much more votes against than proposal C and its ratio (approval votes/disaproval votes) didn't not pass the ProtocolThreshold of this Period)

Once Proposal's revealing stage has passed the proposal is ready to get its final status. At this moment all voters can call the reward function as mentioned previously (Proposal Lifecycle part). Depending on voter's choice and proposal's final status (accepeted or rejected) the voter will get a reward or be penalised. On this part let's focus on reward and analyse penalisation system in next part.

All proposals are taken into account for voting reward as long as they have votes. The protocol does not distinguish on which proposal a voter has voted for or against as long as the voter has voted on the right side (approval or disapproval). This is to prevent vote gathering issues and reward independently of a proposal's "popularity". This way a voter that votes on a "popular proposal" has no advantge over a voter that choses to allocate its ETI to a useful but much less popular proposal. Only the amount of ETI the voter is willing to allocate to its vote is taken into account for voting reward and penalisation.

Voting reward will represent 38.196601125% ETI issued every 7 days:

In first era (first year) there will be 1538.32760285 ETI issued every 7 days for voting reward

In era II (second year) there will be 3076.65520569 ETI issued every 7 days for voting reward

In era III (third year) there will be 4614.98280854 ETI issued every 7 days for voting reward

In era IV (fourth year) there will be 6153.31041139 ETI issued every 7 days for voting reward

In era V (fifth year to tenth year) there will be 7691.63801424 ETI issued every 7 days for voting reward

After era V: 38.196601125% of tail emission's 2.61803% per year issued for voting reward

On week 05/05 2022 -> 12/05 2022. If 3 proposals (Proposal A, B & C) are submited and only 2 proposals (A&C) are accepted. For this example let's say proposal A had 4300 ETI, proposal B 1500 ETI, proposal C 1000 ETI, and Period's voting reward is about 1500 ETI.
Furthermore let's say there were 25 voters, but we'll analyse only votes of a Voter A that voted on right side for all 3 proposals. And finally that the total amount of ETI used by all voters to vote on right side of each proposals is 8000 ETI.
[ (4300 ETI (approval) for proposal A, 1000 ETI (approval) for proposal C and 2700 ETI (disapproval) for proposal B) ] = 8k ETI

Voter A voting reward for Proposal A will be: If Voter A voted for approval with 80 ETI:
bosoms voted to approve Proposal A / (total Period bosoms used to vote on right side) * Period's voting reward
[80 BOSOMS / (8000 BOSOMS) ] * 1500 ETI = 1% of 1500 ETI = 15 ETI
Voter A voting reward for Proposal B will be: If Voter A voted for disapproval with 90 ETI:
bosoms voted to disapprove Proposal B / (total Period bosoms used to vote on right side) * Period's voting reward
[90 BOSOMS / (8000 BOSOMS) ] * 1500 ETI = 1.12% of 1500 ETI = 16.75 ETI
Voter A voting reward for Proposal C will be: If Voter A voted for approval with 50 ETI:
bosoms voted to approve Proposal C / (total Period bosoms used to vote on right side) * Period's voting reward
[50 BOSOMS / (8000 BOSOMS) ] * 1500 ETI = 0.625% of 1500 ETI = 9.375 ETI

Voter B voting reward for Proposal A will be: 0
Voter B voting reward for Proposal B will be: 0
(If a Voter B votes on wrong side for proposal A & B, VoterB gets no voting reward but is penalised for each proposal instead)

Before we get into how the system penalize wrong voters we need to understand the staking system as it is used for the slashing and fee system.

In order to submit or vote on proposals it is necessary to stake ETI. Staking ETI means locking an amount of Etica for a default duration of 28 days and getting BOSOMS in exchange. For each ETI (or subunits of ETI) you stake you get BOSOMS on a 1:1 ratio. Meaning for instance, with a stake of 15 ETI you will get 15 BOSOMS.
The BOSOMS are what is actually used to submit proposals or vote on proposals.

When is it possible to get back ETI after a stake?

If one doesn't use its BOSOMS to vote or submit proposals, one can retrieve its ETI right after the stake duration has expired (28 days).

On the other hand if one uses its BOSOMS to submit proposals or vote on proposals, then the amount of BOSOMS used is locked and used as a collateral for one's vote or proposal submission.

This collateral can be slashed (increasing stake duration) or used for a payment of a fee in extrem cases.

This is unecessary to understand Etica (don't hesitate to skip this),
Just know that there is this possibility as one day it may be useful or necessary to make stake consolidation.

Making a stake consolidation let's you gather several stakes into one. In order to make a stake consolidation you must have at least 2 stakes. It is useful in cases you have a lot of stakes, indeed for gaz issues it's better to make a stake consolidation before calling the reward function in cases you have a lot of stakes.

This is unecessary to understand Etica (don't hesitate to skip this),
Just know that there is this possibility as one day it may be useful or necessary to make stake snap.

Making a stake snap let's you split a stake into two different stakes with different amounts but same expiration date as original stake. In order to make a stake snap you must have at least 1 stake. It is useful in cases you want to retrieve a ETI stake that has already passed the limit date, but you can't retrieve the stake's full amount due to having blocked some BOSOMS in voting system.

Being slashed means one of your stakes' date limit has been increased. The slash takes into account an amount and only slashes this amount worth of ETI. For instance if you have voted with 12 BOSOMS on wrong side then you have a slash of 12 ETI, it means 12 ETI worth of your stakes will have their limit date increased.

The additional duration to one's stake depends on the proposal's slashing ratio. The higher the slashing ratio the more time will be added to the stake.

The slashing ratio is calculated with a formula that takes into account how far the final result was compared to the minimum it would have taken for your choice to be the right choice.
For instance let's say you voted on wrong side for an approved proposal that had a thresehold of 65%, if the proposal actual approval rate was 67% the slashing ratio will be much lower than if the proposal actual approval rate was 80% because 67% is much closer to 65% than 80%.

As long as slashing ratio is below 90% there is no fee and there is only slash for both voters and proposal's creator.

Above 90% slashing ratio, for voters there is a fee of 33% of vote amount and a slash on the 66% remaining. For proposal's creator there is a fee of 100% (on the 10 ETI deposit for proposal creation).

On week 12/05 2022 -> 19/05 2022.
If a proposal (Proposal D) is submited. For this example let's say proposal D had 4300 BOSOMS approval and 758 BOSOMS disapproval.
The following lines show how much the slashing ratio would have been depending on the ProtocolThreshold at the moment of the creation of the proposal.

Reminder of Slashing Ratio formula (5000 represents 50.00%, 10000 represents 100% ...) :
-> For rejected proposals slashing ratio formula is:
10000 - [ ((proposal's bosoms for approval) * 10000 ) / ( (Threshold) * (proposal's bosoms for disapproval + proposal's bosoms for approval) ) ] * 10000
-> For accepted proposals slashing ratio formula is:
10000 - [ ((proposal's bosoms for disapproval) * 10000 ) / ( (10000 - Threshold) * (proposal's bosoms for disapproval + proposal's bosoms for approval) ) ] * 10000

With 4300 BOSOMS approval & 758 BOSOMS disapproval, Proposal D slashing ratio would be:
With a 50% Threshold (Proposal D would be accepted): 70% Slashing Ratio (amounts to +19.6 days for disapproval voters)
With a 75.10% Threshold (Proposal D would be accepted): 39.81% Slashing Ratio (amounts to +11.14 days for disapproval voters)
With a 82.30% Threshold (Proposal D would be accepted): 15.33% Slashing Ratio (amounts to +4.29 days for disapproval voters)

With 4000 BOSOMS approval & 3200 BOSOMS disapproval, a Proposal E slashing ratio would be:
With a 50% Threshold (Proposal E would be accepted): 11.11% Slashing Ratio (amounts to +3.11 days for disapproval voters)
Proposal D would be accepted because: [ 4000 / (4000 + 3200) ] * 10000 = 5555 = 55.55% & 55.55% > 50.00%
With a 58.00% Threshold (Proposal D would be rejected) : 4.21% Slashing Ratio (amounts to +1.17 days for approval voters)
Proposal D would be rejected because: [ 4000 / (4000 + 3200) ] * 10000 = 5555 = 55.55% & 55.55% < 58.00%
With a 82.30% Threshold (Proposal D would be rejected): 32.49% Slashing Ratio (amounts to +9.09 days for approval voters)
Proposal D would be rejected because: [ 4000 / (4000 + 3200) ] * 10000 = 5555 = 55.55% & 55.55% < 82.30%

With 3300 BOSOMS disapproval & 1058 BOSOMS approval, Proposal F slashing ratio would be:
With a 50% Threshold (Proposal F would be rejected): 51.44% Slashing Ratio (amounts to +14.40 days for approval voters)
With a 75.10% Threshold (Proposal F would be rejected): 67.67% Slashing Ratio (amounts to +18.94 days for approval voters)
With a 82.30% Threshold (Proposal F would be rejected): 70.50% Slashing Ratio (amounts to +19.74 days for approval voters)

P.S: To get number of slash days, on the current implementation of Etica Protocol we multiply the slashing ratio by 28 days.

Above 90% slashing ratio,
Voters have a fee of 33% of their vote amount and a slash on the 66% remaining.
For proposal's creator there is a fee of 100% (on the 10 ETI deposit for proposal creation).