Reward Distribution

Reward economics

The governance system uses a dual-reward model: $ARITECT tokens from treasury pools and veARITECT governance tokens for participation.

Reward pool

Each proposal that passes dev team review receives a fixed $ARITECT reward allocation from the governance treasury:

• Proposal reward pool: Fixed allocation per proposal (e.g., 1,000 $ARITECT).
• Author bond: 100-500 veARITECT locked by proposal author (see bond scaling).

Successful proposal distribution (Support ≥ 60%)

When a proposal passes community voting:

$ARITECT rewards:

• Author reward: 30-50% of pool (scales with bond) + bond unlocked.
• Voter rewards: 60% of pool distributed to all voters (Support and Oppose) proportionally by veARITECT.
• Burn: 10% of pool permanently destroyed.

veARITECT rewards:

• Author: +200 to +500 veARITECT depending on bond amount (100→+200, 200→+300, 500→+500).
• Voters: +100 veARITECT per vote cast.

Failed proposal distribution (Support < 60%)

When a proposal does not pass community voting:

$ARITECT:

• Pool: Returned to governance treasury.
• Burn: None.

veARITECT:

• Author: Bond unlocked, no veARITECT bonus.
• Voters: +100 veARITECT per vote cast (participation is always rewarded).

Rejected proposal (dev team)

When a proposal is rejected during dev team review:

• Author bond: Burned (100-500 veARITECT lost depending on bond amount).
• Monthly loss cap: Maximum 20% of veARITECT balance can be lost per month.
• Pool: Not allocated.

Controversy multiplier

$ARITECT rewards are adjusted based on how contested the vote was:

φ = 1 - |(σ - 0.5) × 2|

reward = base_reward × φ

Where:
  φ = controversy factor (0 to 1)
  σ = support ratio

┌───────────────────────────────────────────────────────┐
│              CONTROVERSY MULTIPLIER                   │
├───────────────────────────────────────────────────────┤
│                                                       │
│    φ                                                  │
│  1.0 │███████████████████████████████████████████████ │
│      │███████████████████████████████████████████████ │
│  0.5 │█████████████████████████                       │
│      │█████████████                                   │
│  0.0 │─────────────────────────────────────────────── │ 
│      0%       50%      60%      80%      100%         │
│                  σ (support ratio)                    │
│                                                       │
│  Max reward at σ = 50% (most contested)               │
│  Min reward at σ = 0% or 100% (unanimous)             │
│                                                       │
└───────────────────────────────────────────────────────┘

This incentivizes participation in genuinely contested decisions rather than unanimous votes.

Burn mechanics

• Immediate on-chain $ARITECT destruction.
• Public burn transaction verification.
• Real-time burn counter updates.
• Monthly governance burn reports.