Rewards Distribution
Understanding how SPAI rewards are distributed, claimed, and optimized is crucial for maximizing your farming returns.
Emission Schedule
SPAI tokens are distributed to farmers according to a predetermined emission schedule:
Linear Distribution
Total SPAI allocated: Fixed amount over distribution period
Distribution method: Linear (constant rate per block)
Time period: Typically 6-24 months for initial allocation
Decreasing APR: As TVL grows, APR decreases naturally
Example:
100,000 SPAI allocated over 12 months
~8,333 SPAI per month
~273 SPAI per day
~0.19 SPAI per block (BSC ~3 second blocks)
Pool Allocation
Emissions split between pools:
spBNB/BNB: 40-50% of total emissions
SPAI/BNB: 50-60% of total emissions
Higher allocation to SPAI/BNB compensates for higher IL risk.
How Your Share is Calculated
Your rewards = (Your LP tokens / Total LP tokens) × Emission rate
Example:
You provide $10,000 in SPAI/BNB
Total pool = $1,000,000
Your share = 1%
Daily emissions = 273 SPAI
Your daily rewards = 2.73 SPAI
Claiming Rewards
When You Can Claim
Frequency: Anytime you want
Minimum: No minimum required (but consider gas fees)
Lockups: No lockup on farm rewards (PSM fee applies)
The PSM Fee
When you claim rewards, 30% fee in spBNB equivalent is deducted:
You claim 100 SPAI worth $500
PSM deducts $150 worth of spBNB (30%)
You receive the equivalent of 70 SPAI
$150 goes to protocol treasury
This fee:
✅ Supports peg (creates buy pressure for spBNB)
✅ Strengthens treasury backing
✅ Enables sustainable expansion
❌ Reduces your net rewards by 30%
Fee Dynamics
The 30% is not fixed—it adjusts based on:
Peg health: Higher fees when below peg
Treasury backing: Lower fees when backing is strong
SPAI market price: Adjusts for market conditions
AI optimization: Real-time parameter tuning
Always check current fee before claiming.
Claiming Strategies
Frequency Optimization
Daily, weekly, or monthly claiming have trade-offs:
Claim Daily
✅ Lets you sell SPAI at any moment
✅ Reduces exposure to SPAI price drops
❌ Pays PSM fee 365 times per year
❌ Higher gas costs
Claim Weekly
✅ Fewer PSM fee payments (52 per year)
✅ Lower total gas fees
❌ Week of SPAI price exposure
❌ Less liquidity if you need to exit
Claim Monthly
✅ Minimizes PSM fee impact (12 per year)
✅ Minimal gas costs
❌ Month of SPAI price exposure
❌ Significant lag on taking profits
Optimal for most users: Weekly claiming balances frequency vs fees
Compound vs Take Profits
Compounding
Reinvest rewards into more LP
Exponential growth of position
Maximizes long-term returns
Best during stable/bull markets
Taking Profits
Sell SPAI rewards immediately
Lock in gains regularly
Reduces exposure
Best during uncertain/bear markets
Hybrid Approach
Compound 50-70% of rewards
Take 30-50% as profits
Balances growth and risk management
Compounding Mechanics
Manual Compounding
Costs:
PSM fee (30% of rewards)
Swap fees (0.25%)
Gas fees for multiple transactions
Auto-Compounding
Use yield aggregators like Beefy Finance:
Benefits:
Automatically compounds multiple times per day
Optimizes timing for gas efficiency
Handles all swap/add liquidity/stake steps
Saves time and reduces errors
Costs:
Platform fee (0.1-4.5% of rewards)
Still pays PSM fee
Additional smart contract risk
Compounding Math
Without compounding:
100% APR on $10,000
End of year: $10,000 principal + $10,000 rewards = $20,000
With daily compounding (rough):
100% APR becomes ~170% APY
End of year: $10,000 → $27,000+
Compounding frequency impact on 100% APR:
Daily: ~170% APY
Weekly: ~162% APY
Monthly: ~147% APY
Reward Value Management
When to Sell SPAI
Bullish signals:
Protocol TVL growing
Peg holding strong
Broader market bullish
AI narrative heating up
Action: Hold or compound rewards
Bearish signals:
Protocol TVL declining
Peg weakening (<0.95)
Broader market crashing
Competing protocols gaining share
Action: Sell rewards immediately
Price Target Strategy
Tracking Performance
Key Metrics to Monitor
Current APR: (Annual SPAI emissions to your position / Position value) × 100 — updates constantly as TVL changes
Net APR (after fees): Gross APR × 0.70 (accounting for 30% PSM fee)
IL-Adjusted Returns: Total position value change - deposits + withdrawals (includes rewards and IL)
Realized Gains: Actual profits taken in stables/fiat — the most important metric
Tools for Tracking
DEX analytics: See pool metrics, volumes, fees
Portfolio trackers: DeBank, Zapper automatically track positions
Spreadsheets: Manual tracking for precise calculations
Tax software: Tracks for reporting purposes
Lockups and Restrictions
Farm Rewards
No lockup: Claim anytime
No withdrawal penalty: Exit liquidity whenever
PSM fee applies: 30% on claims (subject to adjustment)
SPAI Staking (for expansion rewards)
If staking SPAI for spBNB:
Lockup period: Check protocol parameters (typically 18-36 hours)
Claim lockup: Must wait before claiming rewards (typically 18 hours)
Reset on interaction: Any stake/unstake/claim resets timers
Unclaimed burn window: Rewards must be claimed within window (typically 48 hours) or burned
This is separate from farm rewards—farm rewards have no such restrictions.
Tax Implications
US Tax Treatment (consult professional)
Reward claims: Ordinary income at claim time
SPAI value: Based on fair market value when received
Compounding: Each compound is a taxable event
LP removal: Capital gain/loss on position
PSM fee: Reduces taxable income (fee paid)
High-frequency claiming = more taxable events Lower-frequency claiming = fewer events but larger per event
Record Keeping
Track every:
Reward claim (date, amount, value)
Compound event
LP add/remove
Token swap
Gas fees
Most portfolio trackers export this automatically.
Optimization Checklist
Before entering:
While farming:
When exiting:
Common Mistakes
❌ Claiming too frequently
Pays 30% PSM fee too many times
Higher gas costs
Minimal benefit
✅ Weekly or bi-weekly claiming is optimal for most
❌ Never claiming (no compounding)
Misses exponential growth
Leaves money on table
✅ Claim and compound regularly
❌ Ignoring PSM fee impact
Overestimates net returns
Surprised by actual yield
✅ Always calculate after-fee APR
❌ 100% compounding during bear
Increasing exposure as protocol weakens
Amplifies losses
✅ Take profits when fundamentals deteriorate
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