# Calculations

Last updated

Last updated

We present the calculus related to the absolute staking model and its associated effects. These calculations illustrate how the model functions to optimize staking rewards and ensure a balanced and sustainable ecosystem rewarding stakers and holders.

$APYa = APYr/t + APYt$

APYa : Absolute annual percentage yield

APYr/t : Relative apy. It's a variable value that changes over time

APYt : Translative apy. It's a fixed value that doesn't change over time

$\text{APY}_{r/t} = \text{maxCap} - \left( \frac{(\text{maxCap} - \text{minCap}) \log(1 + \xi \text{Ratio})}{\log(10\xi)} \right)$

𝝃 : Genesis constant, measure of trend sensitivity.

maxCap: represent the maximum allowable APYr/t.

minCap: represent the minimum allowable APYr/t

Ratio: represent the ratio between two important variables.

$\text{Ratio} = \frac{\text{stakedTokens}}{\text{liquidityTokens}}$

The purpose of the Absolute Staking Model is to incentivize long-term supporters of the DAO to earn passive income from the activities of day traders. When day traders sell their tokens to realize profits, the variable APY increases, creating more incentive to buy and stake, thus benefiting long-term stakers who believe in the DAO's future. (Fig.2)

For a more comprehensive understanding of the mechanism, check **Flywheel Mechanism****.**