DataDAO Rewards

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Important Update

New Rewards Model Effective from April 1

All DataDAOs must comply with VRC-14 (Rewards Model), VRC-15 (Data Access), and VRC-20 (DataDAO Token Standards) by July 1 to qualify for Epoch 6 rewards.

🎯 Key Changes in the New Model

• ✅ No More Top 16 Constraint: Any DataDAO that meets eligibility requirements can qualify for rewards.
• 📆 Quarterly Epochs: Epochs now last 3 months instead of 3 weeks, providing stability and longer-term optimization.
• 💸 TDVL-Driven Reward Pool: The rewards pool is 0.5% of VANA supply, increasing by +0.5% per $500M in Total Data Value Locked (TDVL), with a cap of 5% annually.
• 🧠 Market-Driven Liquidity: Rewards go directly into buying DataDAO tokens and adding liquidity to DEX pools, ensuring deeper markets for data assets.

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🧮 How Rewards Are Calculated

At the close of each 3-month epoch, the total reward pool is allocated across eligible DataDAOs based on a scoring system that accounts for:

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📊 1. DataDAO Token Trading Volume (30%)

• Measured as the trading volume of VANA / DataDAO Token pairs throughout the epoch.
• Higher trading volume enhances market confidence and strengthens token economics.
• Pro Tip: Building deep liquidity and driving organic trading activity can maximize your rewards.

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👥 2. Unique Data Contributors (20%)

• The number of unique wallets contributing data to the DataDAO.
• Encourages DataDAOs to grow their contributor base and aggregate diverse data sources.
• Pro Tip: Engage your community by offering transparent incentives and fostering meaningful contributions.

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💾 3. Data Access Fees (50%)

• Captures the value generated through data usage and query fees.
• This is the most heavily weighted factor, ensuring that DataDAOs with high utility and real-world data usage receive the majority of rewards.
• Pro Tip: Optimize your datataset to attract a diverse range of users and applications.

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📡 Reward Pool Scaling Based on TDVL

The annual DataDAO rewards pool starts at 0.5% of VANA supply but scales based on Total Data Value Locked (TDVL):

• 🟢 Base Pool: 0.5% of VANA supply.
• 🟢 +0.5% Increase per $500M in TDVL: For every additional $500M locked in DataFi applications, the pool grows by 0.5%, capped at a maximum of 5% annually.
• 🟢 Quarterly Distribution: Rewards are distributed quarterly, so the total pool is divided by 4 to allocate to each epoch.

Example:

If TDVL reaches $600M, the reward pool increases to 1% annually. This translates to 0.25% of VANA supply distributed per epoch.

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🔎 How Rewards Are Distributed

💸 Daily Token Buy-Ins

Once rewards are allocated at the end of an epoch:

1. Daily Buy-In Deployment
   • Rewards are deployed daily by buying the DataDAO token and adding liquidity to the DEX pool.
   • The buy-in amount is spread evenly across the next epoch.

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⚠️ Built-in Safeguards for Fair Rewards

To protect against market manipulation and ensure healthy liquidity:

• 2% Slippage Limit:
  • If a daily buy-in would exceed 2% slippage, the transaction is paused and rolled over to the next epoch.
  • Rewards that cannot be deployed due to high slippage are forfeited after 1 epoch.
• Buy-In Gradual Deployment:
  • Rewards are deployed gradually over 3 months, making it difficult for market to manipulate price through short-term spikes.
• Polynomial Adjustment:
  • If one DataDAO’s performance is 1000x higher than others, normalization may be applied to ensure fair distribution.
  • Outlier adjustments are communicated transparently to the community.
• 15% Price Drop Rule:
  • If a DataDAO token’s price drops more than 15% from the reference price, buy-ins are paused, and the DataDAO is placed under review.
  • Reference Price: The weighted average price where DataDAO tokens were purchased by the protocol during the epoch.
• DataDAO Review Protocols:
  • DataDAOs with abnormal trading patterns or inconsistent data usage may be flagged for review.
  • Weak or manipulated PoC mechanisms that artificially inflate contributor counts violate VRC-5 and will lead to disqualification.
  • Serious violations may result in suspension or removal from the rewards program.

🔎 How to Maximize Your Rewards

Unlock your DataDAO’s full potential by following these best practices:

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💡 1. Deepen Your Token’s Liquidity

• Seed sufficient liquidity in your DEX pair to support smooth buy-ins and reduce slippage.
• Tip: A starting pool of $10K–$50K provides a strong foundation.

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👥 2. Grow & Engage Your Contributor Base

• Foster a vibrant contributor community by offering incentives and ensuring transparent data contribution processes.
• Tip: Promote contributor success stories and share how their data powers meaningful use cases.

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📈 3. Optimize Your Data Access Model

• Refine your data access infrastructure to support high query throughput and diverse use cases.
• Tip: Experiment with flexible pricing models to attract a wider range of data consumers.

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🔎 4. Monitor Market Performance & Slippage

• Proactively monitor token performance and liquidity to avoid excessive price swings or high slippage.
• Tip: Consider adding liquidity gradually as trading volume increases to maintain healthy market dynamics.

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🎯 Next Steps: Maximize Your Rewards

To ensure you maximize rewards and maintain eligibility:

• ✅ Ensure Your DataDAO Token Meets VRC-20 Standards
• ✅ Refine & Encrypt Contributor Data to Meet VRC-15
• ✅ Monitor Liquidity & Prevent Slippage Beyond 2%
• ✅ Track Market Performance to Avoid 15% Price Drops

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📢 Ready to Optimize Your DataDAO for Rewards?

Make sure your DataDAO meets all the necessary standards to qualify for rewards in the next epoch:

👉 Follow How to create a DataDAO guide