🏦Staking

Note: The numbers in this document are indicative and not final. They reflect the current framework discussed in Townhall 23 and may change based on community feedback and final launch parameters. We recommend reading this alongside the Townhall recording for full context.

We’re at ~125k connections live and adding more every day. As the network grows, each hotspot owner's reward gets diluted. To give owners exposure to network growth, we’re introducing a staking mechanism that turns idle unclaimed owner‑share into sustainable staking rewards.

How it works

• Collect idle owner‑share from unclaimed hotspots (the 60% that would normally go to an owner)

• Route 30% as staking incentive (remaining 70% funds community growth).

• Distribute pool rewards pro‑rata to stakers , bigger stake = bigger rewards.

With zero net new emissions, this creates sustainable rewards that flow back to long‑term supporters.

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Staking Reward Flow Diagram

This diagram explains how DBT flows from hotspot emissions into staking rewards.

                      +----------------------+
                      |   Active Hotspots    |
                      +----------+-----------+
                                 |
                                 v
             +----------------------------------------+
             |  DBT emitted per hotspot per day (E_t) |
             +-------------+--------------------------+
                                 |
                     +-----------+------------+
                     |                        |
                     v                        v
    +--------------------------+   +------------------------------+
    |Claimed & Active Hotspots |   | Unclaimed & Active Hotspots  | 
    |                          |   |                              |
    | Rewards distributed      |   | Owner Share (60%)            |
    | as per UBI model         |   | Redirected to Incentive Pool |
    +--------------------------+   +-----------+------------------+
                                                 |
                                                 v
                                     +------------------------+
                                     |    Network Incentive   |
                                     +-----------+------------+
                                                 |
                       +-------------------------+----------------------+
                       |                                                |
                       v                                                v

             +----------------------+                       +---------------------+
             |  Staking Incentives  |                       |  Growth Incentives  |
             |        (30%)         |                       |        (70%)        |
             +-----------+----------+                       +----------+----------+
                         |                                             |
                         v                                             v
            +------------------------+                   +----------------------+
            |   Reward DBT staking   |                   | Hotspot Sales        |
            |     (weight based)     |                   | Marketing            |
            +------------------------+                   | Hackathons           |
                                                         | Network expansion    |
                                                         +----------------------+

Staking rewards are funded by network expansion rather than arbitrary token inflation.

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APY Simulation Model

Because staking rewards depend on both network state and staking demand, APY must be modeled dynamically.

The effective APY can be estimated using the following framework.

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1

Step 1: Calculate Daily Staking Reward Pool

Let:

• U_t = active but unclaimed hotspots

• E_t = DBT emitted per hotspot per day

Owner share parameters:

owner_share (of unclaimed hotspot)= 60%
staking incentive = 30% of owner_share

Daily staking pool:

StakePool_t = U_t * E_t * 0.60 * 0.30

2

Step 2: Calculate Total Weighted Stake

Let:

• T = total DBT tokens staked

• W = weighted stake after applying lock multipliers

Lock Duration	Multiplier
3 Months	1x
6 Months	1.5x
12 Months	2.2x

Example distribution:

3M stake = 40M DBT
6M stake = 30M DBT
12M stake = 30M DBT

Weighted stake:

40M * 1.0 = 40M
30M * 1.5 = 45M
30M * 2.2 = 66M

Total weighted stake = 151M

3

Step 3: Daily Reward Per Weight Unit

RewardPerWeight = StakePool_t / WeightedStake

4

Step 4: Calculate Individual Rewards

Example user staking:

Amount = 10,000 DBT
Lock Duration = 12 months
Multiplier = 2.2x
User weight+ = 10,000 * 2.2 = 22,000 DBT

Daily reward:

user_daily_reward = weight * RewardPerWeight

5

Step 5: Convert to Annualized APY

Approximate APY:

APY ≈ (DailyReward / StakedAmount) * 365

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Example Scenario

Assume:

Sold & Active hotspots = 25,000 
Unclaimed & Active hotspots = 100,000

Daily emissions for unclaimed locations:

Daily Mainnet Rewards = 1,643,835 DBT
Daily H.O Rewards = 60% x Daily Mainnet Rewards = 986,301 DBT
Daily H.O Rewards per hotspot = 7.890408 DBT/hotspot
Daily H.O Rewards from Unclaimed Locations = 100,000 x 7.890408 = 789040.8 DBT

Staking Incentives:

Staking Incentive Pool = 30% of Daily H.O Rewards from Unclaimed Locations
                       = 0.3 x 789040.8
                       = 236,712.24 DBT/day 

If total weighted stake: 150M

reward_per_weight = 236,712.24 / 150,000,000
                  = 0.001578 DBT

Calculating APY for a user:

If user has staked 10,000 DBT at 12 month lock
User weight: 10,000 × 2.2 = 22,000
Daily Reward = 22,000 * 0.001578 = 34.716 DBT/day
Annualized = 34.716 x 365 = 12671.34 DBT

Effective APY ~ 126.7%

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Sensitivity Analysis (What Moves APY)

APY increases when:

• more hotspots are deployed but not yet claimed

• fewer DBT tokens are staked

• longer lock durations dominate

APY decreases when:

• more DBT tokens enter staking

• hotspot inventory gets sold to owners

• emission schedule declines

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Growth Phase vs Mature Network

This design naturally produces two phases.

Early Network Phase

• large unclaimed hotspot inventory

• high staking rewards

• strong bootstrap incentives

Mature Network Phase

• most hotspots claimed

• smaller incentive pool

• staking yield decreases

This mirrors the natural growth cycle of infrastructure networks.