Reward Emission Framework

Users earn BOUND by locking DFY stablecoin, aligning governance distribution with long-term protocol stability. By requiring DFY locks rather than speculative staking, the protocol ensures that governance power flows to users committed to the ecosystem's stable foundation.

This mechanism reduces DFY’s circulating supply while rewarding patient capital with governance influence. All locking and reward distribution mechanisms are executed on-chain through audited smart contracts, ensuring full transparency and automatic enforcement of terms. Users who commit to a fixed lock duration begin receiving BOUND rewards on a daily basis for the entire period, with rewards being fully claimable and transferable as they accrue.

Early unlocks are subject to a strict penalty model. If a user decides to exit their lock before the agreed period ends, they are required to pay a penalty fee equal to the total amount of BOUND they would have earned had they completed the full lock duration. This includes both claimed and unclaimed rewards.

The penalty must be settled in BOUND at the time of exit. This mechanism is designed to reinforce long-term participation, prevent abuse of the reward system, and maintain alignment between individual incentives and the overall economic health of the protocol.