Calculation Mechanism for Liquidity Mining and Validator Subsidy Rewards on Sifchain: Token Geysers

# Calculation Mechanism for Liquidity Mining and Validator Subsidy Rewards on Sifchain: Token Geysers - Sifchain uses the Token Geysers mechanism to calculate liquidity mining and validator subsidy rewards for Sifchain liquidity pool participants. The model is based on [Ampleforth's Token Geyser model](https://www.ampltalk.org/app/forum/ampl-geyser-19/topic/about-the-geyser-21/). - Recall, liquidity mining rewards are rewards given for adding liquidity in the Sifchain [liquidity pool subsystem](https://docs.sifchain.finance/roles/liquidity-providers) while validator subsidy rewards are provided for staking or [delegating](https://docs.sifchain.finance/roles/delegators) to the [validator subsystem](https://docs.sifchain.finance/roles/validators). - The amount of rewards accumulated is related to user_pooling_token_time / global_pooling_token_time for liquidity mining (LM) or user_staking_token_time / global_staking_token_time for validator subsidy (VS) Example: Imagine there are two users in the system, Alice and Bob. Alice has staked 10 tokens for 1 day, Bob has staked 5 tokens for 3 days. ``` Alice_token_time = 10 tokens * 1 days = 10 Bob_token_time = 5 * tokens * 3 days = 15 Global_staking_token_time = (Alice_token_time) + (Bob_token_time) = 25 token_days Alice owns (10 / 25) = 40% Bob owns (15 / 25) = 60% ``` This example uses staking for VS but also applies to pooling for LM - All users start out with a base multiplier for their rewards of 1x. This reward increases linearly over time for the longer a user holds their liquidity in a pool (for LM rewards) or staked/delegated (for VS rewards), with a max multiplier of 4x given after 4 months of holding liquidity - A user's multiplier starts independent of when they add their liquidity to the pool or validator. In other words, regardless of if they add liquidity 2 weeks, 4 weeks, or 6 weeks after the program launch, they'll get need to pool for 4 months from when they added their liquidity to get the max multiplier. - The program lasts from Feb 19 to May 14 (12 weeks). Users can enter the program on the last day (May 14) and then hold their liquidity from 4 months thereafter to the max multiplier and thus receive their tokens in Sept. - The liquidity mining rewards on https://dex.sifchain.finance/#/stats and the validator subsidy rewards on https://dex.sifchain.finance/#/rewards are based on an assumption that users hold their liquidity for the 4 months and thus receive a max 4x multiplier - Users who delegate to validators can earn their share of the validator subsidy rewards proportionate to the commission rate charged by their validator. For example, if a validator charges 10% commission then a user would earn 90% of the validator subsidy rewards allocated to their delegated liquidity - For liquidity mining rewards and validator subsidy rewards, a user must claim their rewards to receive them. Claiming rewards stops them from being accumulated even if a user has kept their tokens in the subsystem. Therefore, we encourage users to claim their rewards only when they're ready to withdraw them. - Note, claiming rewards is not yet possible in our UI but it will be soon. For now, all LM and VS rewards are being accumulated and have been since the start of both programs on Feb 19 - The liquidity mining rewards and the validator subsidy rewards available for users are up to 30M Rowan tokens each for each program (60M Rowan in total). This total amount would only be given away if all users left their tokens in the system unclaimed for long enough to receive the max multiplier. - The liquidity mining rewards and validator subsidy rewards are separate because we want to encourage people to contribute to each of these programs as they provide separate utility for the system. - Liquidity Mining rewards are given to users who provide liquidity to liquidity pools. Liquidity pools offer capital for users to swap with. They can include Rowan or other assets (ETH, wBTC, USDT, etc.). Tokens added to a liquidity pool can be removed at any time. - Validator Subsidy rewards are given to users who stake or delegate liquidity to the validator subsystem. Validators secure all transactions on Sifchain via Tendermint Consensus https://docs.sifchain.finance/core-concepts/sifchain-consensus. Only Rowan can be staked or delegated. Tokens added to the validator subsystem can be removed only after an unbonding period https://docs.sifchain.finance/roles/validators#unbonding. - When an LM or VS award is claimed, it will be dispersed at the end of the week it was claimed.