# Dynamic Mining Reward

In Derify protocol, Position Mining rewards are regular settlement, and are affected by the naked position at the end of the epoch.
Assume a position
$p$
, the total mining rewards of the corresponding trading pair at the time of settlement is
$W$
, the total position with same direction in the same trading pair is ​
$P_s$
​, then it's Position Mining reward is
$w$
​ (base reward):
$w=\dfrac{1}{2}*W*\dfrac{p}{P_s}$
The actual position mining rewards are affected by the naked position direction at the time of settlement. If the position is in opposite direction to the naked position, it will receive more rewards, and vice versa.
The Dynamic Position Mining rewards is
$w_{dynamic}$
:
$w_{dynamic}=\begin{cases} w*(1+\mu),&\mu\in(0,1),&p\text{ is opposite to naked position}\\ \\ w*(1-\mu),&\mu\in(0,1),&p\text{ is concurrent to naked position} \end{cases}$
• $p$
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.