In Derify protocol, rewards for position mining is influenced by risk ratio .
As described in Position Mining, assuming that at a given clearing moment for a certain derivative, its total position mining rewards are , current position held is and position pool is , then base position mining rewards are calculated as follows:
Taking into consideration of the influence from , the adjusted rewards are calculated as follows:
is positive if the position held is long, or negative if short.
Mining rewards coefficient is a pre-set constant determining the sensitivity of DMR. The larger , the more rewards for those positions that are opposite to the naked position.
Mining rewards coefficient is a changeable constant and can be adjusted via DAO community voting.
Dynamic Mining Reward (DMR) is a complement for PCF. PCF is an one-off reward for all position changes that reduced naked position, while DMR is a constant influence (through its changes and adjustments) for all position held against the naked position.