Node Emissions
Node Emissions are a crucial aspect of the Yelay ecosystem, designed to incentivize long-term participation and ensure the sustainable growth of the network. This mechanism rewards YLAY token holders who stake their tokens to nodes, providing them with additional YLAY tokens over time.
How Node Emissions Work
Staking for sYLAY: Users can stake their YLAY tokens to a node of their choice. In return, they receive sYLAY (staked YLAY) tokens, representing their stake in the node.
Regular Emission Schedule: Node emissions occur periodically, and new YLAY tokens are distributed to stakers based on the proportion of sYLAY held.
Initial Lock Period: When emitted, new YLAY tokens are automatically locked for a minimum duration of 1 year as additional sYLAY tokens. This ensures a level of commitment from participants and helps stabilize the token supply.
Unlocking Options:
After 1 Year: Upon the lapse of the initial 1-year lock period, stakers can choose to unlock their emitted YLAY tokens. However, doing so incurs a deprecation (the exact rate to be determined), meaning they'll receive less than the full amount emitted.
Full 4-Year Lock: If stakers choose to lock their emitted tokens for the full duration of 4 years, they receive the entire amount of emitted YLAY tokens without any deprecation.
Gradual Unlocking: The unlocking process is gradual, occurring over time to prevent sudden supply shocks to the ecosystem.
The vo Model
This emission and unlocking structure is based on the "vo" (vote-escrowed) model, which has gained popularity in DeFi for its ability to align long-term incentives.
Key benefits of this model include:
Long-term Alignment: By incentivizing longer lock-up periods, the model encourages participants to take a long-term view of their involvement in the Yelay ecosystem.
Supply Stability: The gradual unlocking process helps maintain a stable token supply, reducing potential market volatility.
Sustainable Growth: By distributing emissions over time and incentivizing long-term holding, the model supports the sustainable growth of the Yelay ecosystem.
This emission model presents stakers with strategic choices. They must balance the potential for higher returns from longer lock-up periods against the flexibility of shorter-term access to their tokens. This dynamic creates a diverse ecosystem of participants with varying levels of commitment and involvement.
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