Formalizing SHEN Rewards Distribution Threshold

Temperature Check
1

Summary

This temperature check proposes establishing a clear, consistent policy for distributing ADA staking rewards accrued in the SHEN rewards wallet. Specifically, distributions would occur only when the outstanding rewards balance exceeds 2,000 ADA .

Context

The SHEN rewards wallet currently holds 3,186 ADA and continues to receive approximately 50-90 ADA every 10 days. These rewards originate from ADA staking rewards sent by COTI, earned on SHEN deposits held within the Liqwid SHEN lending market.

At present, distributions are executed on an irregular basis due to two key factors:

  • Reward inflows are relatively small and accumulate slowly.
  • Reward distributions from COTI are not provided on a fixed or predictable schedule.

This has led to occasional uncertainty within the community, particularly among SHEN suppliers, regarding when distributions occur and what to expect.

Problem Statement

The lack of a formalized distribution policy:

  • Creates ambiguity for users monitoring rewards.
  • Results in ad hoc operational decisions.
  • Increases overhead in responding to repeated community inquiries.

Proposed Solution

Adopt a formal policy whereby SHEN rewards distributions are executed only when the outstanding rewards balance exceeds 2,000 ADA .

Rationale

  • Operational efficiency: Reduces the frequency of small, inefficient distributions.
  • Clarity and predictability: Establishes a transparent rule users can understand and track.
  • Expectation management: Provides a clear answer to recurring community questions.

Alternatives Considered

  • Fixed-time distributions (e.g., every 6 months): Doesn’t scale with reward inflows.
  • Lower threshold (e.g., 1,000 ADA): May still result in relatively frequent, low-impact distributions.
  • Fully manual discretion: Current approach; lacks transparency and consistency.

Next Steps

  1. Gather community feedback through this temperature check.
  2. If there is consensus, move forward with a formal governance proposal to ratify the policy.

Conclusion

This proposal aims to bring structure and transparency to SHEN rewards distribution by introducing a clear, threshold-based mechanism.

  • I support this temperature check.
  • I do not support this temperature check.
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