Loyalty-Based Emission Design
yield systems that reward time, trust, and alignment
Loyalty-Based Emission Design is a reward architecture that prioritizes long-term participation over immediate capital injection. Instead of flat APR or front-loaded incentives, these systems calibrate yield distribution based on user loyaltyÔÇömeasured by duration staked, consistency of action, uninterrupted engagement, or progressive unlocks. It shifts the reward economy away from speculative inflows toward values of trust, alignment, and protocol resilience.
Use Case: A protocol distributes emissions using Compound Loyalty Curves, Reward Multipliers, and Reset Penalty Systems, ensuring only those who show loyalty over time unlock the deepest layers of yield, governance, and access.
Key Concepts:
- Compound Loyalty Curves ÔÇö Yield and utility increase exponentially with continued engagement.
- Behavioral Lock-In ÔÇö Privileges are preserved only through uninterrupted participation.
- Reward Multipliers ÔÇö Amplify base yield the longer a user remains staked.
- Emission Timing Strategies ÔÇö Structures like cliffs and no-yield windows enforce pacing and discipline.
- Reset Penalty Systems ÔÇö Exit or inactivity wipes accrued benefits, resetting user position.
Summary: Loyalty-Based Emission Design turns yield into a reflection of commitment. It filters mercenary behavior, slows capital churn, and aligns long-term users with the protocolÔÇÖs health and missionÔÇörewarding those who stay, not just those who arrive early.
| Design Element | Loyalty Signal | Reward Effect | Protocol Outcome |
|---|---|---|---|
| Loyalty Curve | Time Held | Exponential Yield | Deep User Anchoring |
| Multiplier | Staking Duration | Increased APR | Capital Stickiness |
| Lock-In | Unbroken Streak | Tier & Access Preserved | Voluntary Retention |
| Reset System | Exit or Inactivity | Progress Wiped | Loyalty Enforcement |