Delegation

Users are able to purchase $BIT and delegate it to Attestors that are open to delegation to earn rewards. The relationship between Delegators and Attestors is naturally aligned: Delegators want to Delegate to Attestors that have the highest Reputation Score as it will yield the most rewards, which subsequently boosts the Attestor’s Score further. It is in the Attestor’s best interests to perform their duty well to keep their Reputation Score competitive.

Delegator Rewards

Delegators earn Rewards which will come from a separate tranche. 12.5M tokens will be rewarded to all Delegators split over 36 months a monthly basis. Delegator rewards will be split up based on the Attestors’ Reputation Scores.

Example

If the Delegation rewards for the month is 100 $BIT tokens, and all the delegation happens between three attestors whereby Attestor A has a Reputation Score of 1, Attestor B a Reputation Score of 1.5, and Attestor C a Reputation Score of 2.5, then:

• 20 (1.0/5) tokens will be rewarded to delegators attesting with Attestor A;

• 30 (1.5/5) tokens will be rewarded to delegators attesting with Attestor B;

• 50 (2.5/5) tokens will be rewarded to delegators attesting with Attestor C.

These tokens get split between all Delegators based on their own multiplier, explained below.

Delegator Multiplier

Unlike Attestors, Delegators do not have the same scoring system of their rewards for two reasons: they don't have any responsibility in the network, and Delegation provides a great part-time token sink. Hence, the Delegator multiplier is based on the lock duration.

Locked Duration

Users can lock their delegated tokens to increase the multiplier of their rewards in relation to their peer delegators. The lock, and corresponding bonus, is outlined below.

Duration	Bonus Multiplier
3 months	1.10
6 months	1.25
12 months	1.55
24 months	2.50

Example

If the Delegators of Attestor C are getting 50 $BIT tokens for the month, and there are 5 Delegators in total, the rewards will be split as a function of their bonus in the following manner:

• Delegators 1-4, with no lock, have a multiplier of 1x; earning ~7.7 tokens each (1pd/6.5), total ~30.8.

• Delegator 5 has locked their tokens for 24 months, with a multiplier of 2.5x; earning ~19.2 tokens (2.5/6.5).

This mechanism compels Delegators to lock their tokens to avoid significant reward dilution, a la the classic Prisonners Dilemma. Since the reward pool remains unchanged as a whole, failing to lock tokens not only forfeits the opportunity for higher rewards but also results in lower returns compared to a scenario where no participants lock their tokens.