Liquid Mining Tokens
How Quai Network enhances mining incentives through locked mining rewards.
Liquid Mining Tokens (LMTs) revolutionize Proof-of-Work mining by enabling miners to voluntarily delay rewards for higher yields while maintaining liquidity through tokenization. This innovation combines the security benefits of long-term commitments with the capital efficiency of immediate liquidity.
Traditional blockchain networks offer fixed rewards with standard maturity periods. Quai’s LMT system allows miners to select extended lock periods for substantially higher rewards, while still accessing liquidity by trading tokenized claims to these future enhanced rewards.
Combining Yield Enhancement with Liquidity
Quai’s mining model allows miners to opt into extended lock periods for enhanced yields while maintaining liquidity options. Miners can select longer lock durations for higher reward multipliers, receiving tokenized claims that are immediately tradable on marketplaces.
This approach creates a dual benefit: strengthened network security through economic commitments, and improved capital efficiency for mining operations. Tokens represent claims on future enhanced rewards, tradable at prices reflecting their present value, while the underlying rewards remain locked until maturity.
Coinbase Maturity Period
Miners can choose from multiple lock durations for higher yields:
| Lock Duration | Year 1 | Year 2 | Year 3 | Year 4 | Year 5+ |
|---|---|---|---|---|---|
| 2 weeks* | 1.000000x | 1.000000x | 1.000000x | 1.000000x | 1.000000x |
| 3 months | 1.035000x | 1.017500x | 1.008750x | 1.004375x | 1.002188x |
| 6 months | 1.100000x | 1.050000x | 1.025000x | 1.012500x | 1.006250x |
| 12 months | 1.250000x | 1.125000x | 1.062500x | 1.031250x | 1.015625x |
This graduated structure incentivizes long-term network commitment, with rewards up to 25% higher for year-long lockups. The declining multiplier scale ensures network sustainability while maintaining incentives as the network matures.
DeFi Integration
The LMT framework enables integration with decentralized finance through marketplaces, lending, and bundling services. Since LMTs represent claims on future enhanced rewards with specific maturity dates, they function similarly to yield-bearing instruments in traditional finance.
The ecosystem can include specialized marketplaces for trading, lending platforms that accept LMTs as collateral, and bundling services creating diversified products with blended durations and yields. This establishes a versatile economic layer that enhances miner incentives while enabling financial innovation within the Quai Network.
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