Pass Through Rate

The pass through rate is the amount of the demurrage payment that passes through to the next level of pref owners on each catch up.

For example, if the pass through rate is 50%, and an account has a pref payment coming of $500, $250 would be deposited in the account and the additional $250 would be distributed to the pref owners of the account. The pref payments are thus distributed throughout the network in this way.

This rate can be manipulated to either accelerate or decelerate distribution. A higher rate leads to greater distribution of pref payments.

If an account has no pref owners the pass through portion goes to the government as tax. If the issuer gets a pref payment, the pass through part is removed from the money supply.

For purposes of computing power this passthrough may need to be limited a certain numbers of levels or until the amount being passed through reaches a minimum amount.