Adoption of a power-law based APY formula to strengthen sustainability, adapt to market volatility, and better incentivize long-term stakers.
Summary
We propose an update to the WCT staking APY formula to improve competitiveness and ensure sustainability across market cycles. This includes:
Replacing the existing linear decay formula with a power-law function that dynamically adapts rewards to stakeweight.
Increasing the maximum APY to ~30% at current levels, making staking more attractive during volatile conditions.
Preserving long-term sustainability by maintaining a similar overall reward schedule, while enhancing incentives for long-term stakers.
This change complements the P3 staking redesign (Perpetual Staking & Discrete Durations) by combining a simpler staking experience with a reward structure that is both competitive and resilient.
Flat Incentives: The linear decay formula does not sufficiently reward long-term alignment, nor does it create strong incentives during periods of low staking demand.
Limited Adaptability: Rewards remain relatively stable regardless of market conditions, limiting flexibility across bull and bear cycles.
Proposal
1. New APY Formula
Replace the current linear function:
\text{APY} = A \cdot \text{TotalStakeWeight} + B
\\
\text{}
\\
A = -6.46 \times 10^{-8}\quad, \quad B = 12.0808
with a power-law function:
\text{APY} = A \cdot \text{TotalStakeWeight} ^ B
\\
\text{}
\\
A = 45,000 \quad, \quad B = -0.5
2. Key Properties
Market Responsiveness: Higher APYs when stakeweight is low attracting stakers during volatile or uncertain periods.
Long-Term Alignment: Sustained rewards for those who continue staking over longer durations, even as market conditions shift.
Sustainability: At higher stakeweights the APY decays more aggressively ensuring a balanced distribution over time.
3. Resilience Across Market Cycles
In bear markets, the formula increases APYs when stakeweight is low, incentivizing users to hold and support the network.
In bull markets, as demand rises, the formula naturally adjusts downward, aligning rewards with higher participation.
This dual responsiveness ensures that rewards remain attractive, sustainable, and long-term aligned regardless of volatility.
Redesign Benefits
Adaptive Incentives: Dynamically adjusts to staking demand and market conditions.
Long-Term Sustainability: Preserves the same overall rewards schedule, ensuring the project remains on track for multi-year sustainability.
Better Alignment: Long-term stakers earn more for their commitment, while short-term participants are encouraged to extend their staking horizon.
New Staking Rewards Calculator smart contract can be upgraded with the new formula
Frontend:
Update the staking interface to show new APY curves and highlight long-term rewards.
Call to Action
We invite the community to review this proposed formula update and provide feedback. Your input will help ensure we balance competitiveness, sustainability, and long-term alignment in the staking program.
Next Steps
Network team to finalize formula upgrade path in smart contracts.
Frontend team to update staking interface with new APY visualizations.
Treasury to begin applying the updated formula in rewards calculations.
This proposal makes a lot of sense from a long-term infrastructure perspective.
Moving from a linear decay to a power-law APY better aligns incentives with actual network needs higher rewards when participation is low, and natural decay as adoption grows. That’s a healthy, self-balancing mechanism.
I especially like that this model rewards early and long-term stakers more meaningfully, while still preserving the overall reward schedule and sustainability. Combined with P3’s perpetual staking design, this feels like a solid foundation for multi-year growth rather than short-term farming.
Overall, this change improves competitiveness during volatile periods while protecting the protocol in high-participation phases. Supportive of this direction.
Yeah, totally agree with you on this, it will encourage more people to stake their tokens thereby ensuring long term sustainability of the network and also reward long term participants.
Total Stake weight (stWCT) determine whether market is good or not.Meaning if more people stake=more interest = more total Stake weight=good market=lower APY but if more people unstake=less interest=lesser stake weight=bad market=higher APY
I like your proposal, very modern approach against the market fluctuation and very attractive for stakers.
The new approach, if voted and approved, will make the rewards staking amount no more linear and, thus, stakers will not be able to verify the correct distribution and amount.
Could you consider to merge the following idea in your proposal?
that is good changing in Good Time. Now start rebuying $WCT. I already staked my all reward. We need to make more secure that system.
