DigixDAO User Guide: Rewards
Finally, this is the last part (6/6) of the DigixDAO User Guide .
You can now download the full guide in the link here.
Another guide, focusing on interacting with the DigixDAO governance platform will be provided as well in the coming days.
Rewards
Rewards are meant to encourage participation in DigixDAO. The more you participate in DigixDAO, the more rewards you can claim at the end of each Quarter. To determine the amount of DGX you can claim, DigixDAO considers
(i) your Stake,
(ii) your Quarter Points and Reputation Points at the end of the Quarter and
(iii) whether you have participated in DigixDAO as a Moderator.
For each Quarter, the rewards are sourced from the DGX transfer fees and demurrage fees which have been collected up till the end of the particular Quarter. In this section, we will describe how to earn Quarter Points and Reputation Points, the different reward pools for Moderators and Participants and how your DGX rewards are calculated.
Quarter Points
As a Participant, Quarter Points are a direct measure of your participation in a given Quarter. At the end of a Quarter in DigixDAO, your Quarter Points will count towards the amount of DGX you can claim for your participation. Your Quarter Points start from 0 at the beginning of each Quarter and are accumulated over the Quarter through voting on Projects and successfully receiving funding from DigixDAO through Projects which you created.
For the launch of DigixDAO, each vote you successfully cast will earn you 1 Quarter Point. Quarter Points that you earn from receiving funding from DigixDAO are substantially higher than voting, as receiving funding is significantly more onerous than just voting on a Project. Quarter Points earned from receiving funding increases linearly according to the amount of funds received, which are allocated in accordance with the graph below:
For example, assuming that you successfully cast 10 votes in the Quarter (which earned you 10 Quarter Points) and successfully received 50 ETH in funding from DigixDAO (which earned you 100 Quarter Points), you would have accumulated a total of 110 Quarter Points over the Quarter. All your excess Quarter Points after fulfilling the minimum Quarter Point threshold (set at 2) will be converted to Reputation Points on a 1:5 basis at the end of the Quarter and will be reset to 0 for the start of the next Quarter.
Moderator Quarter Points
In DigixDAO, Moderators can earn Moderator Quarter Points through voting for Projects at the Draft stage. As a Moderator, you will receive 1 Moderator Quarter Point for each Moderator vote you cast at the Draft stage of a Project. Excess Moderator Quarter Points after fulfilling the minimum Moderator Quarter Point threshold (set at 4) will also be converted to Reputation Points on a 1:1 basis at the end of the Quarter and will also be reset to 0 for the start of the next Quarter.
As a Moderator, your Moderator Quarter Points are accumulated separately from your Quarter Points. In terms of rewards, only your Moderator Quarter Points will be considered when determining the DGX rewards you can claim from the Moderator Rewards pool, can only use your Moderator Quarter Points to determine DGX rewards you can claim from the Moderator Rewards pool, which also means Moderator Quarter Points are not considered when claiming rewards from the Participant Rewards pool.
For example, assuming you successfully cast 10 Moderator votes (which earned you 10 Moderator Quarter Points) and 20 Participant votes (which earned you 20 Quarter Points), which would be used separately to calculate your DGX rewards from the Moderator Rewards pool and the Participant Rewards pool respectively.
Reputation Points
In contrast with Quarter Points which are a specific measure of your participation over a given Quarter, Reputation Points are a cumulative measure of your participation in DigixDAO over all Quarters. Where Quarter Points can only be gained, Reputation Points can be gained or lost depending on your participation over the existence of DigixDAO.
Reputation Points are earned through:
- The conversion of Quarter Points and Moderator Quarter Points (if any) at the end of each Quarter;
- The Predictive Voting incentive;
- By redeeming a DGD badge; and
- If you voted in Carbon Vote 1 and/or 2.
However, Reputation Points are lost if:
- You do not participate in a Quarter;
- As a Participant, you accumulated less than the minimum Quarter Point threshold over a Quarter, which we have set as 2 Quarter Points for Participants for the launch of DigixDAO; and
- As a Moderator, you accumulated less than the minimum Moderator Quarter Point threshold over a Quarter, which we have set as 4 Moderator Quarter Points for Moderators for the launch of DigixDAO.
The calculation of your Reputation Points is mutually exclusive for Participants and Moderators, meaning your Reputation Points will be determined separately if you are both a Participant and a Moderator. The calculation of Reputation Points will also differ if your Quarter Points (or Moderator Quarter Points) is below the minimum Quarter Point (or Moderator Quarter Point) threshold. A further penalty will be made if you do not lock sufficient DGDs to qualify as a Participant during the Quarter.
We provide two formulas below to calculate your Reputation Points as a Participant and a Moderator. If you are both a Participant and a Moderator, your Reputation Points will be determined by both formulas:
As a Participant
If Quarter Points Minimum Quarter Point Threshold, then:
If Quarter Points < Minimum Quarter Point Threshold, then:
If less than 10 DGDs are locked in the Quarter, then:
Where:
- Reputation Points Change means the change to your current accumulated Reputation Points
- Minimum Quarter Point Threshold means a value of 2 as a Participant
- Quarter Points means the Quarter Points you accumulated over the Quarter
- Maximum Reputation Point Deduction is the penalty if you do not accumulate any Quarter Points in the Quarter, which we have set as 8.334 for Participants
- Reputation Points Earned per Quarter Point is the conversion ratio for Quarter Points to Reputation Points at the end of a Quarter, which is set to 5 Reputation Point per Quarter Point
- Extra Penalty for not Locking DGD is an extra penalty if you do not lock enough DGDs to qualify as a Participant in the current Quarter, which we have set as 1.666 for the launch of DigixDAO
Applying the formulas above and the initial configurations for DigixDAO launch, assuming:
- You are a Participant and not a Moderator
- You have 20 Reputation Points for voting during Carbon Votes 1 and 2
- You earned 10 Quarter Points for voting in 10 voting rounds
- You locked 10 DGDs in DigixDAO
You will end up with a net gain of 40 Reputation Points, which increases your Reputation Points from 20 to 60. Note that your Reputation Points will not go below 0 if your inactivity causes a net loss in Reputation Points.
As a Moderator
If Moderator Quarter Points Minimum Moderator Quarter Point Threshold, then:
If Moderator Quarter Points < Minimum Moderator Quarter Point Threshold, then:
where:
- Reputation Points Change means the change to your current accumulated Reputation Points
- Minimum Moderator Quarter Point Threshold means a value of 4 as a Moderator
- Moderator Quarter Points means the Moderator Quarter Points you accumulated over the Quarter
- Maximum Moderator Reputation Point Deduction is the penalty if you do not accumulate any Moderator Quarter Points in the Quarter, which we have set as 12.5 for Moderators. This value is higher for Moderators as we expect Moderators actively contribute to DigixDAO
- Reputation Points Earned per Moderator Quarter Point is the conversion ratio for Moderator Quarter Points to Reputation Points at the end of a Quarter, which is set to 1 Reputation Point per Moderator Quarter Point for the launch of DigixDAO
Applying the formula above and taking the configurations of DigixDAO at launch, assuming:
- You are both a Moderator and a Participant
- You have 412.5 Reputation Points going into the current Quarter, which is the Reputation Points you gained from redeeming a DGD badge
- You locked at least 842 DGDs in the current Quarter during the Locking Phase, which is the minimum required for a Moderator
- You have 0 Moderator Quarter Points as you did not participate in Moderator voting during the Quarter
- You earned 10 Quarter Points for voting in 10 voting rounds as a Participant
You will end up with a net loss of 4.5 Reputation Points (gain of 8 as a Participant but loss of 12.5 as a Moderator), which reduces your Reputation Points from 412.5 to 408.
Reputation Points for Carbon Votes 1 and 2
In 2018, we conducted Carbon Votes 1 and 2 over August and September to decide:
- The percentage of the total rewards that is allocated to the Moderator rewards pool for each Quarter.
- The minimum amount of DGDs locked to be considered a Moderator.
- Whether US$20,000,000 worth of ETH could be released to us from DigixDAO.
Both Carbon Votes 1 and 2 were approved by DGD holders and the values of 1 and 2 above were decided to be 4.2% and 842 respectively. The addresses which participated in the Carbon Votes are allocated 10 Reputation Points for each vote. Hence, if you voted in both Carbon Votes 1 and 2, you will start with 20 Reputation Points for the launch of DigixDAO.
Source of Rewards
Participants and Moderators receive DGX as a reward for participating in DigixDAO, which can be claimed after the end of every Quarter. The DGX rewards are sourced from the transfer fees and demurrage fees built natively into the DGX token. All transfer fees and one-third of demurrage fees collected as at the end of each Quarter can be claimed as rewards.
Participant Rewards
During Carbon Vote 1, DGD holders decided that 4.2% of the total DGX rewards will be set aside for Moderators, meaning that the Participant reward pool will consist of the remaining 95.8% of claimable DGX rewards as at the end of each Quarter.
As a Participant, the DGX that you can claim from the Participant reward pool is determined by 3-step process. Step 1 is to determine your base, which depends on your Stake in DigixDAO and how many Quarter Points you accumulated relative to the minimum Quarter Point threshold. Step 2 is to determine any bonus added to your base due to your Quarter Points and Reputation Points. Step 3 is to determine the amount of DGX you can claim using your base and bonus.
Step 1: Calculation of Base
if Quarter Points Minimum Quarter Point Threshold, then:
if Quarter Points < Minimum Quarter Point Threshold, then:
Step 2: Calculation of Base with Bonus
Step 3: Calculation of Claimable DGX
Where:
- Base with Bonus is your base including any bonuses from Quarter Points and Reputation Points
- Base means the base used to determine your claimable DGX rewards
- Quarter Points means the Quarter Points you accumulated over the Quarter
- Minimum Quarter Point Threshold has a value of 2 for the launch of DigixDAO
- Quarter Point Scaling Factor is used to determine the value of each Quarter Point is worth relative to your Base, which is set at 400 for the launch of DigixDAO
- Reputation Points means the Reputation Points you accumulated going into the current Quarter
- Reputation Point Scaling Factor is used to determine how much each Reputation Point is worth relative to your Base, which we have set as 2000 for the launch of DigixDAO. Quarter Points are valued higher than Reputation Points as Quarter Points represent active participation in the current Quarter and Reputation Points are merely accumulated passively over the existence of DigixDAO
- Claimable DGX is the amount of DGX you can claim
- Total Base with Bonus of Participants is the total value of base with bonuses of all Participants in DigixDAO
- Participant Reward Pool is 95.8% of all DGX transfer fees and one-third of demurrage fees collected as at the end of each Quarter
Applying steps 1–3 above and assuming:
- You are a Participant and not a Moderator
- You accumulated 10 Quarter Points over the current Quarter
- You locked 100 DGDs in DigixDAO during the Locking Phase
- You had 100 Reputation Points going into the current Quarter
- The total value of bases and bonuses of all Participants in DigixDAO is 10000
- 500 DGX was collected from transfer fees and demurrage fees as at the end of the Quarter
As a Participant, you will be able to claim approximately 5.13 DGX for your participation in the current Quarter.
Moderator Rewards
As a Moderator, you will be able to claim additional DGX rewards from a separate Moderator rewards pool. It was decided in Carbon Vote 1 that the Moderator rewards pool is 4.2% of the total DGX rewards. We decided to grant Moderators a separate pool of rewards for their additional work to filter out undesirable Projects at the Idea and Draft stages.
The process for calculating DGX rewards is similar to that of a Participant, except with certain adjustments to parameters.
Step 1: Calculation of Base
if Moderator Quarter Points Minimum Moderator Quarter Point Threshold, then:
if Moderator Quarter Points < Minimum Moderator Quarter Point Threshold, then:
Step 2: Calculation of Base with Bonus
Step 3: Calculation of Claimable DGX
Where:
- Base with Bonus is your base including any bonuses from Moderator Quarter Points and Reputation Points
- Base means the base used to determine your claimable DGX rewards
- Moderator Quarter Points means the Moderator Quarter Points you accumulated over the Quarter
- Minimum Moderator Quarter Point Threshold has a value of 4 for the launch of DigixDAO
- Moderator Quarter Point Scaling Factor is used to determine the value of each Moderator Quarter Point is worth relative to your Base, which we have set as 400 for the launch of DigixDAO
- Reputation Points means the Reputation Points you accumulated going into the current Quarter
- Reputation Point Scaling Factor is used to determine how much each Reputation Point is worth relative to your Base, which we have set as 2000 for the launch of DigixDAO
- Claimable DGX is the amount of DGX you can claim
- Total Base with Bonus of Moderators is the total value of base with bonuses of all Moderators in DigixDAO
- Moderator Reward Pool is 4.2% of all DGX transfer fees and one-third of demurrage fees collected as at the end of each Quarter
Applying steps 1–3 above and assuming:
- You are both a Moderator and Participant
- You accumulated 10 Moderator Quarter Points over the current Quarter
- You locked 842 DGDs in DigixDAO during the Locking Phase
- You had 412.5 Reputation Points going into the current Quarter
- The total value of bases and bonuses of all Moderators in DigixDAO is 10000
- 500 DGX was collected from transfer fees and demurrage fees as at the end of the Quarter
As a Moderator, you will be able to claim approximately an additional 2.16 DGX for your participation for the current Quarter.
Claiming Rewards
After the end of each Quarter, you are able to claim your DGX rewards directly to your address at any time from the start of the subsequent Quarter. Please note that when we activate demurrage fees, demurrage fees are still deductible even if you do not choose to claim your DGX rewards immediately after they are available. Hence, the same demurrage fees are payable on your DGX rewards whether they are in DigixDAO or you choose to claim them to your address.
If you do not choose to claim your DGX rewards immediately after they are available, they will accumulate over time based on your participation in DigixDAO.
We always appreciate feedback from the community on any angles, so do drop us a note or join our channels below:
· Medium: https://medium.com/digix
· Reddit: http://reddit.com/r/digix
· Twitter: https://twitter.com/digixglobal
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· Github: https://github.com/digixglobal
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