Time-Weighted Rewards
duration-based incentive scaling
Time-Weighted Rewards are incentive models that increase user earnings or privileges based on the length of time assets are staked, held, or committed within a platform. The longer a user maintains participation—without withdrawing or breaking the cycle—the greater the benefit they receive. These models are used to reduce token velocity, build loyalty, and promote long-term alignment between users and protocols.
Use Case: A staking vault distributes rewards using a time-weighted model where users earn 1x yield in the first 30 days, 1.5x after 60 days, and 2x after 90 days—so long as tokens remain uninterrupted in the vault. If withdrawn, the multiplier resets.
Key Concepts:
- Reward Multipliers — Yields increase over time as a form of loyalty bonus.
- Reset Penalty — Unstaking early resets the time counter to zero.
- Behavioral Lock-In — Encourages consistent, uninterrupted participation.
- Protocol Stickiness — Reduces sell pressure and supports token sustainability.
Summary: Time-Weighted Rewards strengthen protocol stability by rewarding users who stay committed over time. They convert passive holding into strategic engagement and support DeFi ecosystems by aligning reward systems with long-term value creation.