II.I.V The Earn Mechanism

The Earn Mechanism is a mechanism in the protocol which allows Approved Earners (see II.II Governance Controlled Protocol Actors) to earn the Earner Rate (see II.III Governance Controlled Protocol Parameters).

The Earner Rate, while input as an explicit value from the TTG, is bound in the smart contracts to be the lower of its input value or the maximum it can be without expending more M than is accruing from Minter Rate. To elaborate, the utilization of the Earn Mechanism can be considered to be the total amount of Owed M that is currently paying the Minter Rate (hereon referred to as active M) divided by the total amount of M in the Earn Mechanism. If a Minter is depermissioned by the TTG, their M will be deducted from the active M and thus lower utilization. The Earner Rate is then the minimum of the value input by the TTG, or the Minter Rate multiplied by utilization, which represents the lowest rate that would be safe to offer before more M is being paid to Earners than is being collected from Minters.

Once approved by the TTG, an Approved Earner can call the Start Earning method. This will check if the address is on the Approved Earners list and if so the address will begin to earn the Earner Rate on a continuously compounding basis. If an address is removed from the Earner’s list, Stop Earning can be called with the address in question passed as an argument to the method, which will cease the accrual of the Earner Rate on the address’ balance.

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