Reward Socialization
Why Reward Socialization?
On many Proof-of-Stake (PoS) networks, individual validators can set their own commission rates, meaning that delegations to different validators may generate varying yields over the same time period. This variation can undercut the fungibility of tokenized staked assets: if two users hold the same number of qAssets, they should ideally receive the same rewards, regardless of their validator choices.
To achieve this uniformity, Quicksilver employs a reward socialization mechanism. This mechanism ensures that:
All qAsset holders receive the same Asset rewards—i.e., the collective Asset/qAsset redemption rate increases at the same pace for everyone.
The inherent value of qAssets remains equal across all delegators, preserving their fungibility.
User-Directed Staking
Despite socializing rewards at the protocol level, Quicksilver still allows delegators to choose or influence which validators their stake supports—referred to as Signaling Intent. This approach:
Empowers Users: They can specify their preferred validator(s) and maintain sovereignty over their staking decisions.
Retains Fungibility: Users continue to receive the same proportional share of rewards through Quicksilver’s socialization mechanism, regardless of which validators they choose.
By combining reward socialization with Signaling Intent, Quicksilver offers both equal reward opportunities and individualized validator choice.
Non-Staking Denominations
When rewards arrive in non-staking denominations (e.g., ICS rewards from the Cosmos Hub, USDC rewards from DyDx), they are distributed in proportion to each user’s qAsset ownership for the relevant chain, determined by claims (once fees have been deducted).
Unclaimed Portion: Any rewards tied to unclaimed qAssets (e.g., those not yet claimed by depositors) go to QCK token holders, ensuring no rewards remain idle.
This design ensures a fair, transparent distribution of rewards—both for the primary staking token and any additional or external reward tokens.
Key Takeaways
Universal Reward Distribution All users benefit from a shared reward pool, guaranteeing equal access to staking yields.
Preserving Fungibility Because every qAsset holder’s redemption rate adjusts uniformly, qAssets remain interchangeable, regardless of validator selection.
Aligned with User Preferences Signaling Intent allows delegators to direct the protocol’s staking choices while still receiving equalized rewards.
Comprehensive Reward Coverage Non-staking rewards—such as ICS incentives or tokens from other ecosystems—are distributed proportionately, ensuring no user is left behind.
Through reward socialization, Quicksilver provides a holistic liquid staking experience that balances fairness, fungibility, and staker autonomy within the expanding Cosmos ecosystem.
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