> For the complete documentation index, see [llms.txt](https://smartmall.gitbook.io/guide/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://smartmall.gitbook.io/guide/smartmall-token-smt-tokenomics/pos-mining.md).

# POS Mining

Overview of POS Mining Rules

**Reward Source and Allocation:**

* **Reward Source**: Rewards in the POS pool are derived from 1% of SMT generated from GUP conversions.
* **Burning Mechanism**: 20% of successfully staked SMT is permanently removed from circulation, entering a "black hole," effectively reducing the total supply.
* **Flexibility in Staking**: Staking can be increased or redeemed at any time without restrictions.

**Staking Units and Quantity Weight:**

* **Staking Unit**: Staking amounts must be in multiples of 10 SMT.
* **Quantity Weight**: Based on the actual amount of SMT staked, accounting for the burn. For example, staking 100 SMT results in 80 SMT being counted towards staking weight after a 20% burn.

**Reward Claim Rules:**

* Rewards can be claimed at any time, however, there must be a minimum interval of seven days between claims.

**Time Weight System:**

* From the onset of staking, the weight increases by 20% every 20 days, doubling after 100 days to a maximum of 2x.
* Weight levels are as follows:
  * 1-19 days: 1x weight
  * 20-39 days: 1.2x weight
  * 40-59 days: 1.4x weight
  * 60-79 days: 1.6x weight
  * 80-99 days: 1.8x weight
  * 100+ days: 2x weight
* **Note**: Users must manually activate the next weight level to benefit from increased weights.

#### Calculation of Staking Weights

Staking weight is determined by two factors: **Quantity Weight** and **Time Weight**.

* **Quantity Weight**: Based on the amount of SMT staked. For instance, staking 100 SMT gives a quantity weight of 100.
* **Time Weight**: Increases according to the length of the staking period, as detailed in the time weight system above.

#### Example

Assume the following scenario for User A:

* Initially, User A stakes 100 SMT for a duration of 20 days, then:
  * Quantity Weight = 80
  * Time Weight = 1.2
  * Total Weight = 80 x 1.2 = 96
* On day 40, User A increases the stake by 100 SMT, bringing the total staked amount to 200 SMT, then:
  * Quantity Weight = 160
  * Time Weight = 1.4
  * Total Weight = 160 x 1.4 = 192

#### Reward Calculation Formula

Rewards are calculated based on the proportion of an individual's staking weight to the total weight in the POS pool: 

<figure><img src="https://3307190497-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FRE7cia6IPLwAOGeIaELh%2Fuploads%2Fo95B2EXvbGapCx5J97lS%2F2024-05-10%20093245.png?alt=media&amp;token=f837714d-d8a1-45c5-a355-747141acf896" alt=""><figcaption><p>Reward Formula</p></figcaption></figure>

#### Key Advantages:

* **Flexibility and Incentivization Combined**: By offering flexible rules for redeeming and increasing stakes along with time-weighted incentives for long-term staking, we encourage sustained user participation.
* **Control of Inflation**: The burning mechanism effectively controls token supply, fostering stable growth in token value.
* **Incentivizing Loyalty and Participation**: The time-weighted incentive mechanism ensures that long-term and loyal users receive greater rewards, enhancing community engagement.

#### *<mark style="color:red;">Reward Distribution</mark>*

*<mark style="color:red;">The SMT rewards claimed are distributed to both the LP (Liquidity Provider) store and the circulating supply, with details available for review on the platform.</mark>*

*<mark style="color:red;">This framework encourages long-term and incremental staking, ensuring fairness and transparency in the incentive system provided by the SMARTMALL platform.</mark>*