In March 2019 we announced a major update to the Synthetix monetary policy: the addition of SNX staking rewards. This release entails increasing the SNX supply from 100m to ~245m over the next five years, with the additional SNX being distributed as rewards to SNX holders for locking their tokens as collateral and minting sUSD.
Why staking rewards were implemented
We outlined in detail here
why this change to the monetary policy was implemented. The primary reason is that in the early stages of a project, much like Bitcoin’s block rewards, staking rewards provide an incentive for people to contribute to the system by performing an action the system requires, and that incentive is receiving more of the currency itself. During the project’s early stages, before the system has generated significant traction, offering SNX stakers only Synth exchange rewards is insufficient until it generates more Synth exchange rewards.
How it works
Each week, each SNX staker will be able to claim their proportion of the weekly SNX staking rewards. Their rewards are calculated by measuring what proportion of the total Synth supply they have minted against their SNX. For example, if Alice has minted 1000 sUSD, and there is a total of 1,000,000 sUSD minted, then she receives 0.1% of the staking rewards.
For the first 52 weeks, 1.44m SNX will be added to the supply each week (see below for full schedule). The snapshot for the first week (March 12-18) was taken on Wednesday March 19 at 12:00 (midnight) UTC. The snapshot for each subsequent week is taken at the equivalent time (Wednesday morning at midnight UTC).
SNX rewards can be claimed for up to two weeks in arrears (this period may be changed in the future). Any unclaimed rewards (beyond the given two weeks) are simply added back into the entire pool of SNX rewards to be distributed in the next reward period.
How to claim
Claiming your SNX staking rewards can be done through Mintr
, our dApp for SNX holders. You can access it through Metamask or directly using a Trezor or Ledger hardware wallet. Once you’ve connected your wallet, head to the ‘Rewards’ tab, where you can withdraw your rewards.
Collateralisation ratio penalties
If your Collateralisation Ratio (i.e. the ratio between the value of your locked SNX value and the sUSD you’ve minted) is below 675%, then you’ll be unable to claim any SNX staking rewards or Synth exchange rewards until you’ve amended it to 675%, which is the 10% buffer from the optimal 750%.
* There is no penalty per se for being collateralised over 750%, but given that SNX staking rewards are calculated by measuring your minted proportion of the total Synths available, if you have minted less than you could have then you will receive less rewards.
SNX staking rewards schedule