Author: @CWSchub
Full Report : Hybrid $MIN Staking V2 [MIP 2.3]
V1/V2 Calculator : Data Visualisation Spreadsheet
Geogebra Calculators: V1 Calculator | V2 Calculator
About the Author : CWSchub is a Minswap Kitty Farmer, an actively engaged community member since March 2022 and author of the last $MIN Staking re-design proposal.
Link to Proposal Discussion: $MIN Staking - Improving the Model & APRs - Temp. Check
Scope of Change
This proposal aims to perform changes on the $MIN Staking mechanism on different levels:
- Core optimisations: affect the reward redistribution logic.
- Peripheral optimisations: other supporting improvements.
Why the current model needs a core upgrade
Problem 1. Tiered stakers are earning little more than the absolute minimum.
The chart below shows live data for the V1 mechanism:
- Blue line — Liquid APR: a flat baseline return, no lock-up required.
- Red line — Tiered APR: almost overlaps the baseline across every reward level, yet Tiered stakers still face an early-exit fee.
- Yellow line — Baseline APR: what everyone would earn if we had only a single Liquid staking option.
Essentially, the current $MIN Staking mechanism yields the same APR as a “fully Liquid” $MIN Staking system with only one option, but require 9 months to realise this yield.
Whether daily ADA rewards are high or low, the Tiered curve never rises far above the baseline. In effect, V1 behaves like a single-option Liquid staking system—but with an added penalty for anyone who locks.
Problem 2. Tiered APR isn’t always greater than Liquid APR. As can be seen in the graph below, when the daily $ADA rewards decrease past a certain point, both options end up earning exactly the same rate.
- Liquid stakers can leave at any time with no fee, so the match-up is fine for them.
- Tiered stakers, however, are still locked and must pay an early-exit penalty—yet now earn no extra return.
The reason why the Tiered APR is so close to the “baseline APR” is because everyone is choosing the Tiered option over the Liquid option:
Proposed Changes included in V2 Hybrid $MIN Staking
Peripheral Changes
- Extend Staking period from 9 to 12 months, to simplify tax implications.
- Change the early redemption penalty curve from “linear” to “cliff”, to punish earlier withdrawals and redeem 99% of rewards after completing 75% of the lockup period.
- Exempt LBE rewards from early withdrawal penalties, to avoid complications post-official distribution.
- Dynamically source the ADA delegation APR for $MIN Staking APR calculations, avoid the “hardcoded” 2.86% APR currently used.
Core Changes
The core improvement is a unique change to the rewards distribution formula with the following consequences:
- Dynamically adapts APR to demand: V1 has a rigid APR implementation (which leads to Problem 1). V2 balances out APRs based on demand, creating a wider range of opportunities.
- Tiered APR > Liquid APR always: V1 does not guarantee Tiered stakers earn higher yield than Liquid stakers, while still incurring early withdrawal penalties. V2 guarantees this.
- General uplift in APRs: The new implementation results in higher APRs for both options, given the baseline APR is higher than $ADA staking.
Improvements on $MIN Staking APRs
Predictions on $MIN Staking APRs follow the Capital Flow Model developed in the $MIN Staking report show the outperformance between V1 and V2 compared to the amount of daily $ADA rewards distributed at current total $MIN Staked and $MIN price.
Research on dynamic stake allocation shows a significant overall improvement in both Liquid and Tiered APRs for V2.
- Liquid APR: V2 outperforms V1 by 100% using current market data.
- Tiered APR: V2 outperforms V1 by 20%-80% using current market data
Conclusions
As per the report’s conclusions, the existing redundancies in the current $MIN Staking mechanism does not justify the existence of two staking options. Additionally, the consistent increase in total $MIN Staked supports the idea that “liquifying” the mechanism is beneficial for Minswap.
The improvements in V2 aim to support a more liquid and dynamic flow of staked $MIN. Otherwise, $MIN staking will receive more support if we transition to a fully liquid model.
Therefore the future of $MIN Staking* lies in:
-
V2 hybrid $MIN Staking: Improved APRs for both the Liquid and Tiered options. With an increase of APRs (Liquid: increase by ~100%, Tiered: increase by ~50%)
-
Fully Liquid $MIN Staking: Everybody earns the same yield, without lockups or fees. APR would drop from ~9.5% to ~9%.
*These numbers take into account data on 07/07/2025.
Scope of Work
- Research & analysis – collapse/saturation study; capital-flow, RP, triviality.
- Mathematical development – PR function, proofs, calibration.
- Simulation tooling – Sheets/GeoGebra calculators; matplotlib suite.
- Financial impact study – V1 vs V2 cost/benefit in yield regimes.
- Technical documentation – redacted formula, full appendix on approval.
- Implementation support – liaise with Minswap Labs for contract upgrade.
- Comms – article, forum posts, DAO Q-&-A.
Proposed Compensation
1. Projected hours worked
Research & analysis: 70h
Mathematical development: 75h
Simulation tooling: 45h
Financial impact study: 35h
Technical documentation: 30h
Implementation support: 10h
Comms: 10h
Total: 275 billable hours.
2. Rate
Freelance rate: US $70 per hour.
3. Total Base Compensation
275 h Ă— $70 = US $19250 rounded to $20000 or the equivalent in $ADA
Milestones
Following the established Base compensation of $20000, the author proposes a set of milestone and success-based checkpoints depending on whether Option A or B is the winning choice.
Option A: V2 hybrid $MIN Staking
Milestone 0
- Governance proposal completion.
Duration: Immediately after governance process (if successful).
Cost – 25% Base compensation = $5000
Milestone 1
- Open sourcing of V2 IP: Premium Redistribution function “C_V2”.
- KPI publication.
- Validation of 1+2 by Minswap Labs.
Duration: no more than 2 months after governance process.
Cost – 25% Base compensation = $5000
Milestone 2
- Implementation of core optimisations.
- Tracking of V2 $MIN Staking subject to defined KPIs.
Duration:
2.1 - TBD by Labs
2.2 - 9 months since implementation of core optimisations.
Cost – $0
Milestone 3
-
KPI target evaluation:
- If KPIs are not met after 9 months, automatically default to Option B in case of not hitting targets.
- Otherwise, proceed to implement peripheral optimisations.
-
Result publication.
Duration: Up to 2 weeks after Milestone 2 completion.
Cost – Up to 75% Base compensation <$15000
Milestone 4 (M3 is successful)
-
Implementation of peripheral optimisations:
a) Extend Tiered Staking period to 12 months.
b) Implement new redemption fee curve.
c) Exempt LBE tokens from early redemption fees.
d) Implement dynamic sourcing for $ADA delegation APR.
Duration: TBD by Minswap Labs
Cost – $0
Option B: Liquid $MIN Staking
Milestone 0
- Governance proposal completion.
Duration: Immediately after governance process (if successful).
Cost – 25% Base compensation = $5000
Milestone 1
- KPI publication - Specific for Option B.
- Validation of 2 by Minswap Labs.
Duration: no more than 2 months after governance process.
Cost – 12.5% Base compensation = $2500
Milestone 2
- Implementation Liquid $MIN Staking.
- Tracking of Liquid $MIN Staking subject to defined KPIs.
Duration:
2.1 - TBD by Labs
2.2 - 9 months since implementation of core optimisations.
Cost – $0
Milestone 3
- KPI target evaluation.
- Result publication.
Duration: Up to 2 weeks after Milestone 2 completion.
Cost – Up to 37.5% Base compensation = $7500
Total Costs (CWSchub)
Option A - V2 Hybrid $MIN Staking
Compensation range for Option A: $10000 - $25000
Option B - Liquid $MIN Staking
Compensation range for Option B: $7500 - $15000
Voting Options
A) Implement V2 hybrid $MIN Staking
B) Change $MIN Staking to Liquid $MIN Staking
- Yes
- No
