Non-linear reward allocation refers to a system where the incentives distributed to participants do not scale proportionally with their contribution or stake. Instead, the reward structure follows a more complex mathematical function, often designed to achieve specific economic or network decentralization goals. This method can encourage broader participation or disincentivize excessive concentration of power. It moves beyond simple proportional distribution.
Context
Discussions around non-linear reward allocation are prevalent in the design of proof-of-stake protocols and decentralized autonomous organizations (DAOs), where optimizing network health and decentralization is a key objective. Protocol designers constantly evaluate these non-linear functions to mitigate wealth concentration and promote more equitable distribution of influence. The effectiveness of these schemes directly impacts the long-term stability and fairness of decentralized networks.
SPARC introduces a non-linear, tier-based reward mechanism for Proof-of-Stake, strategically incentivizing smaller operators to enhance network decentralization and security.
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