Performance Mining Rewards
The purpose of the Performance Mining Program is to attract users during the crucial launch phase of the project and to serve as an important tool to align stakeholder incentives - helping attract and preserve users while driving long-term growth of the protocol.
The program entails the distribution of STRT token rewards to users -
- initially, from token inflation over a 10-year period, supplemented by a proportion of trading fees (i.e. Boosted Performance Mining is added);
- subsequently from a proportion of trading fees alone (i.e. Boosted Performance Mining only).
Performance Mining Rewards constitute, by far, the largest category of STRT issued - and is allocated exclusively to the community and based on protocol-enhancing behavior.
A pool will only qualify for performance mining rewards if it met or exceeded a hurdle rate, currently set at 5% per annum (but measured over the assessment period). That percentage can be changed by governance vote.
A pool’s share of any given period’s vesting of STRT is determined by that pool’s performance (converted to USDC) and STRT Power. These have been set at a 50/50 weighting, but this is alterable by governance vote.
A user’s share of any pool’s allocated STRT for any given period is determined by the user’s participation in a pool (expressed as a percentage of the total value locked in the pool) plus the user’s STRT Power in the pool (expressed as a percentage of the total STRT Power of the pool). These have been set at a 50/50 weighting, but this is alterable by governance vote.
Therefore, the Performance Mining Reward Mechanism is -
- First, filtering out all pools that did not achieve a hurdle rate over the assessment period;
- second, a calculation of a score for each participant in a pool that met the hurdle rate;
- third, a score for each pool;
- fourth, a division of that period’s STRT Performance Mining Rewards to each pool depending on each pool’s score; and
- fifth, a division of each pool’s STRT Performance Mining Rewards among individual participants in the pool, depending on each participant’s individual score.
The entire Performance Mining Reward Allocation will be distributed over 10 years on a 0.7% per week decreasing basis. Performance Mining Rewards will be calculated on an hourly basis, and the entire hour’s allocation will be distributed according to the Performance Mining Reward mechanism. Any portion of the trading fees allocated to Performance Mining Rewards will similarly be distributed on an hourly basis.
During both the Phase 1: Performance Drop and Ongoing Performance Mining Phases, performance will initially be measured from the Phase 1 Commencement Date. This will likely be sufficient for the initial phase of the protocol. However, value judgments on what might constitute good performance is anticipated to diverge as the protocol begins to mature, such that incentives may need to be different over shorter and longer periods, so as not to (for instance) disincentivize new pools. Accordingly, in the months immediately following the launch, the Performance Mining Mechanism will be updated to cater to these different time horizons, as well as any other modifications needed to ensure effective incentivization of users towards achieving the protocol objectives.
Last modified 8mo ago