At the end of one day you will receive 0.9889 $PHI.
This mathematical decay formula is valid for 1095 epochs or one calendar year. After the 1095 epochs, the ROI per epoch will remain 0.099 $PHI, or 0.297 $PHI per day. This makes a monthly return in the second year of $8.91PHI per month.
Here is a graph allowing you to visualize the decay curve for the Zeus Node:
A clear view of the mathematical function of the decay.
When we analyzed most node projects, a common trend emerged: the inexorable decline in the price of the native token.
The reason for this is that users are converting the protocol's native token into stablecoin. This is totally normal because in the real world it is not (yet) possible to pay your rent, bills or gasoline in $CAKE, $STRONG or $PHI.
This price drop is also multiplied by the inflation of the supply available on the market.
Traditional DAO tokens like Olympus DAO / Wonderland / Jade / ATLAS show that this business model has not yet proven itself in terms of price stability despite the incentives of the (3.3) rule and other variants.
This is how the rewards decay was born.
Instead of encouraging inflation of the supply of the token in circulation, we think it is better to reduce it.
This decay mechanism allows us to:
=> Limit the supply available on the market;
=> Reduce the bearish pressure when users take profits;
=> Offer sustainability to the protocol in order to offer returns in the long term.
The decay system is only one of the stability guarantee mechanisms implemented in the Prometheus Protocol.
See the other Prometheus price stability mechanisms: