Incentive Marketplace

In the M Hash Layer2 PoW ecosystem, the Incentive Marketplace allows protocols to offer whitelisted incentive tokens to miners, encouraging them to support specific on-chain activities or liquidity pools. This creates a competitive environment where different protocols vie for miner attention and block reward allocation.

How Incentives Work

When a miner produces a block, they can choose to allocate part of their earned $MHA rewards toward one or more whitelisted Reward Vaults. These vaults are tied to specific protocols or applications.

When rewards are distributed:

• The miner receives a commission in incentive tokens from the protocol
• The remaining incentive tokens in the vault are distributed to participants who have staked eligible assets in that vault
• All claims are processed automatically via M Hash Layer2 Hub
• Users can claim their incentives at any time, with no expiration

Roles in the Incentive Marketplace

Incentive Token Governance

• Only whitelisted Reward Vaults may distribute incentive tokens
• Each vault can support up to two different incentive tokens
• Adding a token or changing its manager requires governance approval

Managing Incentives

The protocol’s Token Manager must set an incentive rate:

• Format: “X tokens per $MHA” (e.g., 10 USDC/$MHA)
• The rate cannot be lowered unless the vault’s token balance is fully depleted
• Additional tokens can be deposited at any time, and the rate can be increased
• Once deposited, incentive tokens cannot be withdrawn

Example:

Later updated:

Commission Distribution

• Miners can set a commission rate (default 5%, max 20%) for incentives captured from vaults
• Example: If a vault pays 100 USDC for 10 $MHA, and a miner with 5$MHA worth of rewards, the miner earns 5 USDC, and the remaining 95 USDC goes to vault participants

Timing vs Rate

• Distribution timing (e.g., 3-day or 7-day streaming) is set by the Reward Vault
• The exchange rate (e.g., 10 USDC/$MHA) remains fixed regardless of the reward release schedule