# Dynamic Mining Reward

In Derify protocol, rewards for position mining is influenced by risk ratio $V_{ratio}$.

As described in Position Mining, assuming that at a given clearing moment for a certain derivative, its total position mining rewards are $W$, current position held is $p$ and position pool is $P$, then base position mining rewards $w$ are calculated as follows:

$w=W*\dfrac{|p|}{P_c}=W*\dfrac{|p|}{X_c-Y_c}$

Taking into consideration of the influence from $V_{ratio}$, the adjusted rewards $w_{dynamic}$ are calculated as follows:

$w_{dynamic}=\begin{cases} w*\Big(1+\mu*\dfrac{X_c+Y_c}{X_c-Y_c}\Big),&p>0\\ \\ w*\Big(1-\mu*\dfrac{X_c+Y_c}{X_c-Y_c}\Big),&p<0 \end{cases}$
• $p$ is positive if the position held is long, or negative if short.

Mining rewards coefficient $\mu$ is a pre-set constant determining the sensitivity of DMR. The larger $\mu$, the more rewards for those positions that are opposite to the naked position.

Mining rewards coefficient $\mu$ 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.