Reward Distribution

The values and parameters on this page are preliminary and subject to change before launch.

This page explains how staking rewards are distributed among stakers and how each individual share is calculated.

Two Distribution Factors

The share of daily rewards depends on two factors:

Factor	Description
Staked Amount	Number of MSIG tokens locked
Multiplier	Value based on lock duration (0.083x to 2.0x)

The effective stake combines these two factors. A longer lock results in a higher multiplier, leading to a larger share of rewards even with the same staked amount as a position with a shorter lock.

The system computes effective stake, determines each position's share of the total pool, and distributes rewards proportionally each day.

How Distribution Works

The effective stake is defined as the number of staked tokens multiplied by the vote-escrow multiplier:

$$\text{effective\_stake}_i = \text{staked}_i \times \text{multiplier}_i$$

Reward Share Calculation

The reward share is defined as effective stake divided by the total effective stake of all stakers.

$$\text{reward\_share}_i = \frac{\text{staked}_i \times \text{multiplier}_i}{\sum_{\text{all stakers}} (\text{staked} \times \text{multiplier})}$$

Daily Reward Calculation

The daily reward is calculated as the individual reward share multiplied by the total daily reward pool.

$$\text{daily\_reward}_i = \text{daily\_pool} \times \text{reward\_share}_i$$

APY Estimation

The APY (Annual Percentage Yield) projects the daily reward rate over a full year.

$$\text{APY}_i = \frac{\text{daily\_reward}_i \times 365}{\text{staked}_i} \times 100\%$$

Where:

• staked_i = staked MSIG token amount

• multiplier_i = vote-escrow multiplier (0.083x to 2.0x based on lock duration)

• effective_stake_i = weighted stake contribution to the pool

• reward_share_i = proportion of the daily reward pool (value between 0 and 1)

• daily_pool = total daily rewards available (see Staking Rewards)

• daily_reward_i = MSIG tokens received per day

• APY_i = estimated annual percentage yield

Practical Examples

Example 1: Basic Reward Calculation

• Staked: 10,000 MSIG with 1-year lock (1.0x multiplier)

• Daily pool: 30,000 MSIG

• Total effective stake: 12,000,000

$$\text{effective\_stake} = 10{,}000 \times 1.0 = 10{,}000$$

$$\text{daily\_reward} = 30{,}000 \times 0.00083 = 25 \text{ MSIG/day}$$

$$\text{APY} = \frac{25 \times 365}{10{,}000} \times 100\% = 91\%$$

Example 2: Multiplier Impact Comparison

• User 1: 10,000 MSIG with 2-year lock (2.0x multiplier)

• User 2: 10,000 MSIG with 1-month lock (0.083x multiplier)

• Daily pool: 30,000 MSIG

• Total effective stake: 12,000,000

$$\text{effective\_stake}_{\text{user1}} = 10{,}000 \times 2.0 = 20{,}000$$

$$\text{effective\_stake}_{\text{user2}} = 10{,}000 \times 0.083 = 830$$

• User 1: 30,000 × 0.00167 = 50 MSIG/day

• User 2: 30,000 × 0.00007 = 2 MSIG/day

With the same staked amount, User 1 receives 24x more rewards due to their longer lock.

APY Disclaimer: No specific APYs are guaranteed. Actual reward rates depend on the total staked amount, treasury balance, and individual lock duration. Any examples shown are for illustrative purposes only.

Auto-Compounding

The staking system includes an optional auto-compound feature. When enabled, rewards are automatically restaked at the current lock duration. This causes the effective stake to grow over time, and future rewards are calculated based on a larger balance.

Example: Starting with 10,000 MSIG and earning a 0.25% daily reward rate:

Day	Staked Balance	Daily Reward	New Balance
1	10,000	25	10,025
2	10,025	25	10,050
3	10,050	25	10,075
...	...	...	...
30	~10,753	~27	~10,780

With compounding, the staked balance grows at an accelerated rate compared with non-compounded rewards, because each reward accrual increases the principal on which subsequent rewards are calculated.