Rewards to ecosystem participants are distributed through sharing in protocol rewards and through Hxro Network's reward token, escrowed HXRO ("esHXRO").
As mentioned in the Hxro Staking overview, 50% of all network fees derived from transactions on Hxro-powered dapps are distributed to HXRO stakers. While all stakers receive rewards, greater stakeweight is given to wallets that lock tokens for a longer period of time to encourage alignment with, and participation in, the long-term objectives of the network.
Network rewards are distributed in the denomination in which the network earns the fee. Currently, staking rewards are predominantly denominated in USDC, as well as BONK and HXRO (in the form of esHXRO). All reward distributions other than esHXRO have no lockup.
Escrowed Hxro (esHXRO)
Escrowed HXRO (or “esHXRO”) is the mechanism by which HXRO rewards are paid to network participants. esHXRO is a claiming token that is backed 1:1 by standard HXRO. esHXRO is not transferable and cannot be traded.
esHXRO can be used in the following ways:
esHXRO can be staked and locked to the network in the same way standard HXRO can be staked. It will receive all of the same stakeweight/governance weight and multiplier benefits for the duration of locking as HXRO.
esHXRO can be claimed for HXRO. esHXRO will unlock and automatically convert to HXRO 1/365 per day once it is committed to the claiming contract.
Any esHXRO-denominated rewards distributed as staking rewards are subject to an inverse locking period based on the duration of your locked stake.
Locked Rewards are non-transferrable. If tokens are staked for the minimum period of 7 days (1 week), earned rewards will become claimable by the wallet in 365 days (1 year) from the date they were earned. Conversely, if the tokens are staked for the max period of 3 years, earned rewards will become claimable on the day they are received. A linear scale for reward locking will apply based on the number of days a wallet chooses to lock its staked HXRO tokens.
Note: esHXRO does not change overall token supply. No esHXRO can be created without being backed 1:1 by an existing HXRO token.