SKYT Performance-Based Rewards Mechanism

Compliance framing. Skyocean operates as a commodity trading company, not a lender. Skyocean executes every trade as principal — Skyocean owns the commodity, takes the operational risk, and distributes performance-based rewards to SKYT holders who have locked SKYT to activate working capital capacity for specific trade cycles. Rewards come from trade outcomes, not from interest, dividends, or profit-sharing arrangements. There are no guaranteed returns. Actual rewards depend on trade performance.

Overview

The SKYT performance-based rewards mechanism distributes rewards to SKYT holders who have locked their tokens to activate Skyocean’s working capital capacity for specific trade cycles. The mechanism uses a tiered structure based on the amount and duration of SKYT locked. The mechanism includes provisions for maintaining attractive indicative reward ranges during early stages or lower-volume operating periods through strategic use of reserved tokens — these are operating-level discretionary distributions, not contractual yields.

Key Parameters

Base Parameters

  • Total Supply: 500,000,000 SKYT
  • Initial Reward Distribution Pool: 10% of annual operating margin (indicative; governed)
  • Reserved Tokens for Distribution Supplementation: 20,000,000 SKYT
  • Target Token Price (Month 18): $1.22 (indicative; market-dependent)

Capacity-Activation Tiers

Tier SKYT Locked Lock Duration (Months) Indicative Annualized Reward Range¹
1 1,000 - 4,999 3 ~10% (indicative)
2 5,000 - 9,999 6 ~12% (indicative)
3 10,000 - 19,999 9 ~15% (indicative)
4 ≥ 20,000 12 ~18% (indicative)

¹ Indicative ranges are not guaranteed. Actual reward rates depend on trade outcomes during the lock period (volume of trade-cycle margin generated by Skyocean’s principal trading), price of SKYT at distribution time, and any governance adjustments to the distribution pool. Performance-based, not contractual.

Mechanism Design

1. Reward Pool Calculation

The reward pool is funded from Skyocean’s operating margin on principal trades:

# Example calculation (illustrative)
Annual_Operating_Margin = $2,000,000
Reward_Distribution_Pool = Annual_Operating_Margin × 0.10  # 10% allocation, governance-adjustable
Base_Pool = $200,000

2. Tier Weight Calculation 

Tier_Weight = (Average_Locked_Amount / Max_Locked_Amount) × (Lock_Duration / Max_Duration)

Weight Factors per Tier

  • Tier 1: 0.0375 (3,000/20,000 × 3/12)
  • Tier 2: 0.1875 (7,500/20,000 × 6/12)
  • Tier 3: 0.5625 (15,000/20,000 × 9/12)
  • Tier 4: 1.0000 (20,000/20,000 × 12/12)

3. Reward Supplementation

Token Price Consideration

Reward adjustment based on token price to maintain indicative reward ranges:

def calculate_supplemental_tokens(tier, current_distribution_rate, indicative_range, token_price):
    shortfall = indicative_range - current_distribution_rate
    supplemental_amount = (locked_value × shortfall) / token_price
    return supplemental_amount

This is an operational-discretion mechanism, not a contractual top-up. Supplementation comes from reserved tokens, governed by the parameters below.

Reserved Token Allocation

  • Maximum annual supplementation: 5% of reserved tokens
  • Dynamic distribution based on tier weights
  • Discretionary, governed adjustment based on operating margin levels

Implementation Details

1. Locking Process

Entry Requirements

  • Minimum lock period per tier
  • Token locking smart-contract mechanism
  • KYC/AML verification where applicable

Reward Distribution 

# Base reward from trade-margin pool
base_reward = (locked_amount × tier_weight × reward_pool) / total_weighted_locked

# Supplemental tokens if needed (discretionary)
supplemental_tokens = calculate_supplemental_tokens(tier, current_distribution_rate, indicative_range, token_price)

total_reward = base_reward + (supplemental_tokens × token_price)

2. Early-Unlock Penalties

Unlock Time Penalty
< 25% duration 50%
25-50% duration 25%
> 75% duration 10%

3. Reward Distribution

Distribution Frequency

  • Monthly reward calculations
  • Quarterly token buybacks
  • Annual supplemental token distribution (discretionary)

Distribution Method 

def distribute_rewards(participant):
    base_reward = calculate_base_reward(participant)
    supplemental_tokens = calculate_supplemental_tokens(participant)
    
    if needs_supplementation(base_reward, participant.tier):
        distribute_supplemental_tokens(participant, supplemental_tokens)
    
    distribute_base_reward(participant, base_reward)

Sustainability Measures

1. Reserved Token Management

  • Annual cap on supplemental token usage
  • Gradual reduction in supplementation as base operating margin scales
  • Market impact consideration

2. Dynamic Adjustments

  • Quarterly review of distribution-pool percentage
  • Annual review of tier structure
  • Market condition adaptation
  • Governance-adjustable parameters

Example Calculations

The examples below use illustrative numbers and are not representations of actual or guaranteed reward levels.

Tier 1 Example

  • Locked Amount: 3,000 SKYT
  • Token Price: $1.22

  • Locked Value: $3,660

  • Base Reward from Pool: $4.43
  • Indicative Range Target: $366 (~10% annualized equivalent)
  • Supplemental Amount (illustrative): $361.57
  • Supplemental Tokens: 296.36 SKYT

Tier 4 Example

  • Locked Amount: 20,000 SKYT
  • Token Price: $1.22

  • Locked Value: $24,400

  • Base Reward from Pool: $1,652.53
  • Indicative Range Target: $4,392 (~18% annualized equivalent)
  • Supplemental Amount (illustrative): $2,739.47
  • Supplemental Tokens: 2,246.28 SKYT

Risk Management

Market Considerations

  • Token price volatility impact
  • Trading volume monitoring
  • Liquidity management

Sustainability Checks

  • Reserved token depletion rate
  • Indicative reward range sustainability analysis
  • Market impact assessment

Future Adjustments

Planned Evolution

  • Gradual reduction in supplementation as operating margin scales
  • Adjustable distribution-pool percentage (governance-controlled)
  • Additional tier benefits
  • Enhanced locking options

Governance Integration

  • Community voting on adjustments
  • Parameter modification proposals
  • Transparency reporting

Technical Implementation

Smart Contract Structure 

// Example contract structure
pragma solidity ^0.8.0;

contract PerformanceRewards {
    // ... locking, distribution, governance logic ...
}

Monitoring and Reporting

  • Real-time distribution-rate tracking
  • Token distribution monitoring
  • Locking analytics
  • Performance metrics

Appendix

Indicative Reward-Rate Calculation Formula (illustrative) 

Indicative_Rate = (Base_Reward + Supplemental_Value) / Locked_Value × 100%

This formula computes a backward-looking indicative annualized rate, not a forward-looking promise. Future rates depend on trade outcomes.

Tier Weight Formula 

Weight = (Average_Lock / Maximum_Lock) × (Duration / Max_Duration)

Reserved Token Usage

  • Annual usage cap: 1,215,940 tokens
  • Distribution by tier
  • Tracking mechanism

Compliance Notice

This document describes Skyocean’s performance-based rewards mechanism in technical detail. Nothing in this document constitutes (a) an offer of securities, (b) a guarantee of any specific reward level, (c) an interest-bearing investment, (d) a profit-sharing arrangement, or (e) a lending or borrowing arrangement. Skyocean executes commodity trades as principal. SKYT is a utility token used to activate working capital capacity and to participate in governance; rewards are performance-based and depend on trade outcomes. Skyocean operates under EU MiCA-aligned framing where applicable. KYC/AML applies where required. Refer to docs/investors/index.md for the full regulatory and compliance framing, and to the Terminology Compliance framework for the operational vocabulary that governs every Skyocean communication.

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