papers/lux-governance-dao/sections/08-incentive-structures.tex

\section{Incentive Structures}


\subsection{Participation Rewards}

\textbf{Voting Rewards}:
\begin{itemize}
\item 0.1 LUX per vote cast (distributed quarterly)
\item Bonus 0.05 LUX for voting within first 24 hours
\item Annual participation reward: \~{}5-8\% APY on staked governance tokens
\end{itemize}

\textbf{LP Author Rewards}:
\begin{itemize}
\item 500 LUX for successfully activated protocol LP
\item 250 LUX for standard LP
\item 1000 LUX for high-impact LP (determined by community vote)
\end{itemize}

\textbf{Reviewer Rewards}:
\begin{itemize}
\item 50 LUX per substantive review (quality assessed by LP editors)
\item 100 LUX for full security analysis
\item 25 LUX for minor feedback and corrections
\end{itemize}

\subsection{Implementation Bounties}

Complex LPs may have implementation bounties:

\begin{table}[h]
\centering
\begin{tabular}{@{}lr@{}}
\toprule
\textbf{LP Complexity} & \textbf{Bounty Range} \\ \midrule
Minor (1-2 weeks) & 2,000-5,000 LUX \\
Medium (3-6 weeks) & 5,000-15,000 LUX \\
Major (7-12 weeks) & 15,000-50,000 LUX \\
Critical (>12 weeks) & 50,000-200,000 LUX \\ \bottomrule
\end{tabular}
\caption{Implementation bounty ranges}
\end{table}

\textbf{Bounty Conditions}:
\begin{itemize}
\item Full implementation matching LP specification
\item Test coverage above 90\%
\item Security audit passed (if critical)
\item Documentation completed
\item Integration with existing systems verified
\end{itemize}

\subsection{Delegation Rewards}

Token holders delegating votes to validators share rewards:

\begin{equation}
\text{DelegatorReward} = \text{ValidatorReward} \times (1 - \text{Commission}) \times \frac{\text{DelegatedStake}}{\text{TotalStake}}
\end{equation}

Where:
\begin{itemize}
\item $\text{Commission}$: Validator commission rate (typically 5-20\%)
\item $\text{DelegatedStake}$: Amount delegated by this delegator
\item $\text{TotalStake}$: Validator's total stake (self + delegated)
\end{itemize}