Staking Rewards

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

Staking rewards are the primary incentive for long-term MSIG holders who lock their tokens in the vote-escrow system. Rewards are distributed daily to stakers based on their weighted share of the total staked pool.

Two Funding Sources

Staking rewards come from two distinct sources:

Source	Description
Tokenomics Reserve	Initial allocation set aside specifically for staking rewards
Circular Revenue	A portion of treasury buyback activity may flow to the staking treasury over time

The total MSIG supply is capped. Staking rewards are not derived from newly minted tokens.

The system blends these two sources dynamically based on treasury health, transitioning from reserve-funded to fully revenue-funded as the system matures.

Why Blended Transition?

How staking rewards blend between tokenomics reserve and circular revenue. All numbers provided here are for illustrative purposes only.

The blended transition mechanism exists to protect the token economy during volatile conditions:

Black Swan Protection Revenue can fluctuate dramatically due to market conditions, user adoption cycles, or unexpected events. Without a safety mechanism, a revenue drop would cause staking rewards to collapse.

Predictable Rewards Stakers need consistent, predictable reward rates to remain engaged. The tokenomics reserve acts as a buffer when circular revenue falls short, maintaining reward stability regardless of short-term revenue volatility.

The system calculates a blend ratio based on the staking treasury's USD value:

$$\text{blend\_ratio} = \frac{\text{treasury\_usd} - \text{min\_threshold}}{\text{max\_threshold} - \text{min\_threshold}}$$

Where:

• treasury_usd = Current USD value of tokens in the staking treasury

• min_threshold = $5,000 (below this, system uses 100% tokenomics reserve)

• max_threshold = $20,000 (above this, system uses 100% circular revenue)

• blend_ratio = Clamped between 0 and 1

Mode Determination

Staking Treasury	Mode	Reward Source
Below $5,000	Pure Tokenomics	100% from reserve at 50,000 MSIG/day
$5,000 – $20,000	Blended Transition	Linear blend of both sources
Above $20,000	Pure Circular	100% from treasury at 10% of treasury/day

Daily Reward Calculation

Tokenomics Reserve contribution (decreases as treasury grows):

$$\text{tokenomics\_amount} = \text{daily\_reserve\_rate} \times (1 - \text{blend\_ratio})$$

Circular Revenue contribution (increases as treasury grows):

$$\text{circular\_amount} = \text{staking\_treasury\_tokens} \times \text{release\_rate} \times \text{blend\_ratio}$$

Total daily rewards:

$$\text{daily\_rewards} = \text{tokenomics\_amount} + \text{circular\_amount}$$

Where:

• blend_ratio = Transition factor calculated above (0 to 1)

• daily_reserve_rate = 50,000 MSIG/day (fixed allocation from tokenomics reserve)

• staking_treasury_tokens = Number of MSIG tokens currently in the staking treasury

• release_rate = 10% (percentage of treasury tokens released daily)

• tokenomics_amount = Contribution from tokenomics reserve

• circular_amount = Contribution from circular revenue

• daily_rewards = Total tokens distributed to stakers each day

Practical Examples

Example 1: Treasury at $12,000 USD (Blended Mode)

• Treasury value: $12,000 (within transition range)

• Treasury tokens: 100,000 MSIG

$$\text{blend\_ratio} = \frac{12{,}000 - 5{,}000}{20{,}000 - 5{,}000} = \frac{7{,}000}{15{,}000} = 0.467$$

$$\text{tokenomics\_amount} = 50{,}000 \times (1 - 0.467) = 26{,}650 \text{ MSIG}$$

$$\text{circular\_amount} = 100{,}000 \times 0.10 \times 0.467 = 4{,}670 \text{ MSIG}$$

• Daily rewards: 26,650 + 4,670 = 31,320 MSIG/day

Example 2: Treasury at $25,000 USD (Pure Circular)

• Treasury value: $25,000 (above $20k threshold)

• Treasury tokens: 100,000 MSIG

• blend_ratio = 1.0 (capped at maximum)

$$\text{daily\_rewards} = 100{,}000 \times 0.10 = 10{,}000 \text{ MSIG/day}$$

Example 3: Treasury at $3,000 USD (Pure Tokenomics)

• Treasury value: $3,000 (below $5k threshold)

• blend_ratio = 0 (capped at minimum)

$$\text{daily\_rewards} = 50{,}000 \times 1.0 = 50{,}000 \text{ MSIG/day}$$

The reserve maintains full reward output even when circular revenue is low.

The blended transition ensures consistent rewards, while smoothly transitioning to a fully revenue-backed system as the system matures. All numbers provided here are for illustrative purposes only.