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Reward Distribution

The WYND DAO Staking contract is able to efficiently distribute any $WYND tokens sent to it to all stakers, proportional to their reward shares. In the first section, we explained how you get different rewards shares per token depending on which bucket you delegate to. If you hold say 5,000 reward shares out of a total of 5,000,000, then you will receive 0.1% of all rewards paid to the contract.

We allow the flexibility to allow anyone or any contract to send rewards to the Staking Contract. For example, the WYND DAO may vote to send 1 million $WYND as an one-time payment to be distributed to all current token holders. However, the main mechanism we designed for payout is an epoch-based reward distribution, much like Osmosis LP rewards.

The distributor contract can be configured and funded by the WYND DAO. It receives some parameters on how many WYND to distribute how often. To start with, we set this to 30,000 $WYND every 1 day, or about 10 million $WYND a year. But the WYND DAO can change this in the future (raise it, lower it, or even make it hourly) with a successful vote. However, they must then ensure they direct a sufficient amount of the inflation to the distribution contract to cover these rewards.

The distribution contract cannot mint WYND, it can only drip out $WYND previously sent to it on a well-defined schedule.

Example returns

For now, we will focus on the initial conditions of WYND DAO, although these may change in the future based on successful proposals from the WYND DAO. Those are a total of 30,000 $WYND split over all stakers, regardless of the total amount staked.

You can quickly see that the lower the total staked is, the higher the APR is for every staker, making this extremely profitable the first few days (and benefiting the most active WYND members). Let’s examine some scenarios.

Early stage:

Others have staked 100,000 $WYND for 3 months, providing a total of 100,000 * 6 = 600,000 reward shares
You stake 500 $WYND for 1 year, giving you 500 * 16 = 8,000 shares.
After one day, you will receive (30,000 * 8,000 / 600,000) = 400 $WYND in one day!

Now, such crazy rewards will only be the case when few have invested.

Mid stage:

Many airdrop holders have staked.
Now something like 10,000,000 $WYND for 3 month and another 10,000,000 $WYND for 6 months.
That would be 10,000,000 * 6 + 10,000,000 * 12 = 180,000,000 reward shares.
You have reinvested your earnings from the early days and now have 2000 $WYND at 1 year = 32,000 shares.

Each day, you would receive (30,000 * 32,000 / 180,000,000) = 5,33 $WYND
This is still 5,33 * 365 = 1946 $WYND a year or almost 100% APR, assuming only 20% of total WYND is staked.

Calculating APR

The APR depends on the total amount distribute, the total number of stakers and the total reward shares you have. All numbers can be queried from the blockchain.

When you decide to stake in a bucket with a reward multiplier M, given a total rewards shares of T (likely 6 - 15 times total staked WYND), we have an APR of:

APR = 365 * 30000 * M / T

In the mid stage example above, T is 180,000,000, and we would have the following APRs for the various unbonding periods:

Length Reward Multiplier APR
1 month 2 12.1%
3 month 6 36.5%
6 month 12 73%
1 year 16 97.3%
2 year 20 121.6%

As more people keep staking, these APRs will go down. And the WYND DAO can vote to direct more of the inflation rewards to the distribution contract to increase them if they deem it the most effective use of funds. (Or they can use them for LP rewards, investing in other protocols, funding development and marketing, etc).

Now you have a good overview of the staking rewards, and how beneficial it is to stake early on, read more about stakers can participate in the voting process itself.

Voting Process