PROTOCOL SPEC
SRM-1: Signal Reward Mechanism
Version 1.0 — December 2024
Overview
The Signal Reward Mechanism (SRM-1) defines how profits from hardened signals are distributed among participants in the validation pipeline.
Rewards are only distributed when signals resolve profitably. Failed signals (stopped out) result in no reward distribution.
Reward Split
👑
30%
King
🐝
20%
Swarm
⛏️
40%
Miners
🏛️
10%
Treasury
Reward Conditions
Profitable Close
Position closed with positive PnL. Full reward pool distributed according to split.
Stop Loss
Position stopped out. No rewards distributed. Loss absorbed by execution capital.
Partial Close
Position partially closed. Rewards distributed proportionally to realized PnL.
Miner Reward Distribution
The 40% miner allocation is distributed based on proof quality:
- Witness proofs: Share proportional to trial count and pass rate
- Counterexamples: Bonus for close counterexamples (distance < 0.02)
- Early submission: 10% bonus for first valid proof
Treasury
The 10% treasury allocation funds:
- Protocol development and maintenance
- Infrastructure costs (compute, data feeds)
- Future miner incentive programs
- Emergency reserves
Example Distribution
// Signal sig_abc123 closes +$1,000
King: $300
Swarm: $200
Miners: $400 (split among 4 miners)
Treasury: $100