PIP-26 - Review & Propose Rewards Parameters

Panther Improvement Proposals (PIPs)
1

Panther Improvement Proposal (PIP) Draft: Review & Propose Rewards Parameters

Proposal Overview

This draft proposal initiates a community-driven process to review and propose the protocol’s reward structure in the live production environment, including onboarding bonuses, miner rewards, user rewards for deposited assets, and transaction-based incentives. The Panther DAO Council will review community input and formalize this into a PIP for community voting.

Background

Panther Protocol operates a decentralized ecosystem where rewards incentivize participation from miners, users, and new community members. Existing reward mechanisms, such as those in PIP-9 for Advanced Staking, have been effective in production but require adjustment to ensure fairness, sustainability, and alignment with community goals. This proposal seeks to engage the community in refining these parameters based on current economic conditions and asset values.

Proposed Actions

  1. Community Discussion Phase:

    • Open a dedicated thread on the Panther Discussion Forum (e.g., “Review & Propose Rewards Parameters”) for community members to suggest and debate reward structures.
    • Suggested topics include:
      • Onboarding bonuses for new users (e.g., PRP vouchers or $ZKP allocations).
      • Miner rewards tied to the processing fee, plus additional incentives.
      • User rewards for deposited assets, ensuring competitive PRP payouts.
    • Discussion period: 14 days from proposal publication.

  2. Council Review:

    • The Panther DAO Council will collect and synthesize community input, ensuring proposals are feasible, compliant with protocol economics, and aligned with decentralization goals.
    • The Council will draft a formal PIP, including specific reward parameters, funding sources (e.g., the 450M $ZKP protocol rewards pool), and implementation timelines.

  3. PIP Voting:

    • The finalized PIP will be published on Snapshot.org by an authorized Author for community voting.
    • Voting eligibility: $ZKP holders (staked or held) on Ethereum Mainnet or Polygon, per PIP-7 voting logic.
    • Voting period: 7 days, with power calculated based on a Snapshot at the proposal creation block.

Proposed Reward Parameters (Initial Suggestions)

  • Onboarding Bonuses:
    • New users receive a 500 PRP voucher upon account activation, claimable within 30 days.
    • New users should receive enough ZKP GAS to allow them to active their zAccount
    • First 1,000 users to complete KYC and a transaction receive 1,000 $ZKP each.
  • Miner Rewards:
    • Miners receive a guaranteed minimum of 80% of the processing fee (paid in $ZKP) for each transaction batch they process, plus an additional 10% bonus in $ZKP to incentivize participation. The remaining 10% of the processing fee contributes to a premium pool, distributed based on queue age (e.g., 0.1% per pending block if funds allow).
  • User Rewards for Deposited Assets:
    • 8% APR on deposited assets (in $ZKP or stablecoins) paid in PRP, distributed monthly, with a minimum deposit threshold of 1,000 $ZKP to qualify.
    • Bonus: 500 PRP for users maintaining a deposit for 90 consecutive days.

Funding

  • Rewards will be sourced from the existing 450M $ZKP protocol rewards allocation, with a proposed initial budget of 100,000 $ZKP (plus equivalent PRP from the rewards pool) for the first 6 months, subject to community approval and market conditions.

Next Steps

  • Community Feedback: Submit ideas and critiques on the forum thread within 14 days.
  • Council Draft: The Council will present a revised PIP within 7 days post-discussion.
  • Voting: If approved by the community, implementation will begin 7 days after voting concludes.

Additional Considerations

  • Ensure reward distribution does not compromise protocol security or decentralization.
  • Monitor POL and $ZKP market rates to adjust miner rewards dynamically via future PIPs if needed.
  • Evaluate the PRP payout sustainability based on deposited asset growth and adjust thresholds accordingly.
2

Will other deposited assets like polygon and eth get rewards or just ZKP and stable coins?

3

Same as in Canary all supported assets which are deposited would attract yield.

From Canary:

image
image605×185 17.2 KB

4

How will we ensure the rewards aren’t abused by individuals? Especially the first 1000.

Should the incentive be for the use rather than sign up & take more than a 1zkp or even 100zkp transaction value - it may be more sensible for users that have one verified account via proper registration to have to transact a set amount or deposit a set amount valued in a usdt value before rewards are distributed.

5

Don’t like it, 1,000 USD in ZKP for the first 1,000 sign-ups is crazy. All of the rewards mentioned in this PIP seem extremely excessive and should be considered again.

6

Hey everyone,

Just wanted to add a few thoughts to expand on some of the existing proposals. I’m not looking to overcomplicate things the goal is to make sure the protocol stays sustainable long term. Feel free to chop any of this up or remix as needed. :wink:

Dynamic APR Scaling for Deposits:
To align deposit rewards with protocol growth and emissions control, I suggest a model where APR starts at 8/10% when total value deposited is under $2M, drops to 6/7% between $2M and $5M, and scales down to 4/5% above that. The DAO Council could review these thresholds quarterly. This keeps rewards attractive early on while helping prevent runaway inflation as the protocol scales.

PRP Utility & Redemption Mechanics:
To give PRP more utility and reduce short term selling, it should be burnable for benefits like fee discounts or faster transaction processing. We could also introduce optional vesting: 50% of earned PRP claimable immediately, with the remaining 50% after 30 days. This adds long term value without forcing users into locked contracts.

Staking Rewards & Lock Boosts:
I didn’t see a mention around staking incentives, so I wanted to propose we clarify and expand this. Keep the existing PRP reward for staked ZKP, but offer optional lock-ups with bonus multipliers. For example, a 30 day lock could offer a 5% boost, 90 days could give 15%, and 180 days could earn 25%. We might also consider an incentives around a % of generated protocol revenue. This gives stakers more flexibility and deepens alignment with the protocol.

Onboarding Bonus Structure:
I think the flat 1,000 ZKP reward for onboarding is a bit too much without some engagement baked in. Instead, we could break that up into milestones: 250 ZKP after account activation, KYC, and first transaction; another 250 ZKP after 30 days of active use say, five or more protocol interactions and a final 500 ZKP if the user deposits or stakes at least 500 ZKP for 30 days. This ties rewards to meaningful participation rather than one time claims. We could also vest the rewards so they unlock in stages.

Gas Stipend for Onboarding:
It’s a small thing but a huge blocker new users shouldn’t be stuck at the door because they can’t afford gas to activate a zAccount. We should offer a one time ZKP gas stipend (non-withdrawable, usable only for activation). This lowers barriers and gets people using the protocol right away.

Tiered User Ecosystem:
As the protocol matures, we could experiment with tiers based on usage and participation. Power users who contribute liquidity, vote consistently, or engage with advanced features could unlock benefits like reduced fees, faster processing, or access to tools. This could be entirely optional and wouldn’t affect baseline access, but would reward those who go deeper with in the Panther ecosystem.

ULTIMATE REWARDS PROGRAM > Long Shot Maybe for the feature :rofl:
As the protocol matures, we should start moving away from total reliance on the 450M $ZKP rewards pool. A portion of all processing or transaction fees could flow into a DAO controlled treasury, creating a revenue driven model. This treasury could fund grants, contributor rewards, future incentive programs, liquidity initiatives, or even emergency stabilization measures all governed by community vote. It’s a simple step that makes Panther more self sustaining and gives the DAO true long term financial flexibility.

I’m excited to see how the community helps refine the feature of Panther. Lets get it!

8

Hello Chris, it says 1000 $ZKP tokens not $1000 USD in $ZKP tokens, that would be insane.

9

All good ideas, I have been wondering about the floating APR myself, it was there in the initial staking program. I will check what functionality we have around that in the protocol today.

The numbers I put above are just ‘imaginary’ numbers based on the canary rewards, no single number in my draft is in any way final, I personally don’t believe we should give a single ZKP and we definately should try to make the protocol sustainable and not have to rely on the protocol reward pools.

10

I think if we must, maybe we should give the first 100 people - 100 $ZKP :slight_smile:

11

Today 06/08/2025 The DAO council met to discuss these matters and and we have revised already these items based on community feedback:

Proposed Reward Parameters (Revised Suggestions)

Onboarding Bonuses:

First 1000 new users receive a 1000 PRP voucher upon account activation.

New users should receive enough ZKP GAS to allow them to active their zAccount.

Miner Rewards:

Miners receive 50% of the processing fee (paid in $ZKP) for each transaction batch they process.

Proposed Treasury Collection:

The remainder of the processing fees are collected by the DAO treasury for future incenvites.

User Rewards for Deposited Assets:

8% APR paid in PRP, with value benchmarked to $ZKP via a floating internal AMM rate. Final return may vary depending on rate movements.

( Further investigation with development team regarding potential PRP mechanisms tbc)

Funding

Rewards will be sourced from the existing 450M $ZKP protocol rewards allocation, with a proposed initial budget of 6,000,000 $ZKP (plus equivalent PRP from the rewards pool) for the first 6 months, subject to community approval and market conditions.

Next Steps
Community Feedback: Submit ideas and critiques on the forum thread.
Council Draft: The Council will present a revised PIP.

1 Like
12

I think the miner rewards are a little on the low side now in comparison to before and generally low as an industry standard (bare minimum), I think it should be 60-75 % miner rewards to miners and the rest for future incentives.

13

GM. IT is actually not low.

For every single transaction this is ‘charged’ for example:

image
image287×152 36 KB

The miner receives the network fee as well as the entire processing fee, while the protocol itself retains none of the fee. Whenever there are multiple transactions the miner receives multiple network fee’s combined with multiple processing fees in a single transaction.

Effectively on Canary the miners where receiving all processing and network fee’s while the protocol did not receive any of these fees.

Are you not perhaps referring industry standard as typical POW mining with a 2% pool fee?
This is not POW mining, this is UXTO batch transaction processing, which merely requires the miner to submit a transaction on chain which costs a small amount of pol - shown in the ‘network’ fee above.

14

We are trying to setup a meeting with @onblock on this topic this week to clarify all the details then we will publish a revised proposal.

15

Below Updated Values please discuss:
Token Pools and Council Configuration

Token Pools

Description Value
ZKP amount (initially) reserved for donations (Subsidy Pool) 1 M $ZKP (Total)
ZKP amount (initially) added to the PRP AMM liquidity 100 000 $ZKP
POL amount (initially) deposited for the Paymaster with the EntryPoint 1000 POL
Base ZKP Reserves pool that sends ZKP to AMM (zkpreserveController contract) -
ZKP amount releasable into the PRP AMM per block -

Fees

Description Value
Fee (in ZKP) for KYC attestation 100 ZKP
Fee (in ZKP) for KYT attestation 25 ZKP
Protocol Fee (%) on withdrawal 0.30%
Treasury percentage of the protocol fees (%) 50

Rewards (in ZKP)

Description Value
Rewards to miner per UTXO mined 2 ZKP

Rewards Vouchers (in PRP)

Description Value
PRP rewards for onboarding (one time per user) 1000 PRP

Recharge AMM (one function on UI that does multi-call)

Description Value
Reward for ZKP release to AMM 50 PRP
Reward for Split the protocol fee (claiming to PRP AMM and the treasury) 50 PRP
Swapping protocol fees 100 PRP
Claiming Paymaster debts 100 PRP

Subsidy (in ZKP)

Description Value
Donation amount (in ZKP) for each tx type:
- Account activation 200
- Account renewal 0
- Voucher claim 0
- PRP conversion 0
- Internal transfer 0
- Deposit 0
- Withdraw 0
- Zswap 0
- Gas 0

Minimum Cap to Trigger Rewards

Description Value
Min rewardable ZKP amount for:
- (1) Protocol fee split to PRP AMM (fee master) and the treasury 1000 ZKP
- (2) Swapping protocol fees 50 POL
Min rewardable ZKP amount for zkpreservecontroller release to AMM 20,000 ZKP
Min rewardable native amount for claiming Paymaster debt 10

APY

Description Value
APY on Deposited Assets 10%*
1 Like
16

I like the active use case for onboarding over a time period. This would prevent onboarding, then off boarding and using another user name to claim another reward. I’m sure the 1000 ZKP reward could be adjustable depending on what the value of ZKP would be.

17

I’m on board with the current numbers for mainnet launch — they’ll definitely help get people in the door and boost participation. That said, both the direct ZKP rewards and the PRP rewards are pretty front-loaded right now. If we leave things wide open forever, we could end up with way too much ZKP hitting the market over time.

My take: to keep things attractive we can fine tune or run with these reward numbers at launch, but already have a plan in place to dial them back as the protocol grows. We could do something like a halving-style drop for ZKP payouts, slowly trim PRP emissions, and maybe replace part of the rewards with non-inflationary perks. Over time more rewards could come from protocol fees instead of just minting new tokens.

On top of that, having a buyback or burn system using some of the protocol revenue to take ZKP out of circulation would help keep the token strong long-term. That way we keep things exciting for early adopters without creating a big inflation problem down the road.

18

Thats not possible in the protocol today to calculate.

19

Notes on Parameters the Community Can Influence

ZKP

  • PRP and ZKP are tuned separately but connected via the rewards pool’s single-sided AMM.

  • Concerns about “too much ZKP hitting the market over time” depend on how many ZKP rewards are entering the AMM.

  • On the Canary network, 2 million ZKP were distributed per month over time.

  • There is therefore a theoretical limit on how much PRP can be swapped for ZKP at any given time.

  • Ultimately, the DAO decides and votes on ZKP emissions. The Council should not make this decision alone, so if you have a suggested figure in mind, your input is appreciated.

PRP

  • Protocol-level activity generates PRP.

  • The more PRP exchanged for ZKP at the same time, the less PRP is worth.

  • If users wait for the AMM to refill with ZKP, PRP will regain more value.

  • Protocol activity also expands the privacy set, which means the protocol rewards users for conducting transactions.

  • Note that protocol activty require zZKP gas.

Fees

  • Protocol-level operations require zZKP gas: more activity = higher demand for ZKP.

  • When using the Relayer for privacy, users must also pay chain gas (e.g., POL). This is a chain cost, not something dictated by us, and cannot be avoided.

  • In addition, we propose a processing fee of 2 ZKP per UTXO for miner rewards. This fee could be adjusted higher or lower.

  • A 0.3% withdrawal fee is split 50/50:

    • Half goes into the rewards pool.

    • Half goes to the DAO treasury, which supports protocol sustainability.

  • There are also compliance-related costs:

    • KYC (Know Your Customer) fees per user.

    • KYT (Know Your Transaction) fees for each deposit and withdrawal.

    • These integrations are external services and do not operate for free.

Subsidies

  • Every protocol action requires zZKP gas, plus KYC and KYT must be covered.

  • This creates a bootstrapping problem for new users: how can they pay gas if they don’t yet hold zZKP?

  • Our current proposal: each unique account receives a subsidy of 200 ZKP to cover:

    • The first KYC fee.

    • KYT for activity at the "edges”.

    • Gas for a couple initial transactions.

  • In the future, users could fund this themselves somehow. For now, the protocol will front these costs — potentially supported through the Treasury wallet.

Burns & Buybacks

  • I strongly advise against proposing a direct “burn” or “buyback” scheme. These carry the appearance of securities-like behaviour, which could bring unwanted regulatory scrutiny to a compliance-oriented privacy protocol.

  • Networks such as BNB or ETH implement protocol-level burns as automated mechanisms tied to fees. These are positioned around network efficiency, health, and deflation — not profit.

  • A similar system could be explored: for example, linking part of the processing fee to an automated burn.

  • Buybacks should also be avoided for regulatory reasons. However, note that:

    • All withdrawal fees are collected in the withdrawn asset (e.g., ETH).

    • Since the rewards pool only operates in ZKP, conversions will need to take place.

Final Notes

  • I hope this sheds light on how community-driven parameter adjustments can shape outcomes.

    • Want fewer ZKP emission? Reduce the rewards pool or reduce PRP issuance.

  • As the protocol expands, more adapters will be added, utility will increase, and activity will grow.

  • Growth cuts both ways: greater scale means more rewards are needed, but ideally ZKP’s value rises with demand, so proportionally fewer tokens are required.

  • I recommend quarterly reviews of protocol parameters, with community involvement in deciding adjustments.

  • Finally, I firmly believe: we should not mint our way to success. Our value proposition comes from privacy-enhancing tools, coupled with proactive compliance features.

20

Very well explained. Your input as always is greatly appreciated.

21

How much is the PRP to ZKP ratio.. (we still have lot of unclaimed PRPs :wink: )