Reward System on Splendor v3

This document outlines the comprehensive implementation plan for a dynamic, multi-tier, multi-level reward system for node operations on the Splendor EVM chain. The system incentivizes node operation and network growth by adjusting rewards based on participation levels, reliability, and staking commitments.

1. Initial Token Allocation

• Total Allocation: 60,000 SPL tokens
• Purpose: Distributed to early investors and reserved for treasury to fund operations and future growth initiatives.

2. Node Validator Tiers and Staking Requirements

Note: Node Validators must maintain a target 99.9% uptime. Failure to meet this uptime threshold will result in reduced rewards.

3. Multi-Level Validator Reward System

The multi-level validator reward system incentivizes node referrals and staking participation. Each validator earns based on their own stake and a fractional portion of their referred validators’ staking activity and node uptime, up to three levels deep.

💡 Key Mechanics:

• Validators receive rewards based on their own stake.
• They also earn a fraction of rewards from referrals up to 3 levels, proportional to the staking amount and uptime of each referral.
• Referral Reward Multipliers:
  • Level 1: 100% (full reward of referral’s staking)
  • Level 2: 50% of referral’s staking reward
  • Level 3: 25% of referral’s staking reward

🧠 Example:

1. Alice stakes 1 SPL with 99.99% uptime → Eligible for ~1 SPL/year (self stake reward).
2. She recruits:
   • Bob: stakes 0.01 SPL → Alice receives 0.01 SPL/year (Level 1).
   • Charlie: stakes 0 SPL → No reward contribution.
3. Bob recruits:
   • Dave: stakes 0.1 SPL →
     • Alice receives 0.05 SPL/year (Level 2, 50% of Dave’s staking reward).
4. Dave recruits:
   • Eve: stakes 0.1 SPL →
     • Alice receives 0.025 SPL/year (Level 3, 25% of Eve’s staking reward).

✅ Summary of Distribution for Alice:

📊 Referral Reward Flow

Reward Calculation Logic

To ensure fair distribution of staking incentives and referral bonuses, Splendor’s reward system uses two core formulas.

🎯 Validator Monthly Reward

MonthlyReward = DynamicRewardPool × (StakeAmount × TargetAnnualReturnRate / 12) × (UptimeSeconds / SecondsInMonth)

Where:

• DynamicRewardPool: Total tokens available for the current month
• StakeAmount: Number of SPL tokens staked by the validator
• TargetAnnualReturnRate: Depends on validator tier (e.g., 1.0 for 100% return)
• UptimeSeconds: Number of seconds the validator was online this month
• SecondsInMonth: Total number of seconds in the month

🔗 Referral Bonus per Level

ReferralReward_L = ReferralStake × TierAnnualRate × ReferralMultiplier_L / 12

Referral multipliers:

• Level 1: Multiplier = 1.0 (100%)
• Level 2: Multiplier = 0.5 (50%)
• Level 3: Multiplier = 0.25 (25%)

5. Implementation Strategy

• Smart Contracts:

  • Handle staking logic
  • Manage tier-based rewards
  • Track referral relationships
  • Calculate dynamic rewards

• Integration & Monitoring:

  • Integrate with node software
  • Monitor node uptime and reward eligibility in real-time

6. Security and Compliance

• Security Audits: Full audit of smart contracts and operational logic
• Legal Compliance: Ensure the invite-only multi level structure is transparent, fair, and adheres to regulations

7. Reward Distribution and Block Time

• Block Time: 2 seconds per block
• Distribution: Monthly, based on uptime and active participation

Status: Planned