Divi 3.0 New Reward Distribution

As of Aug 23rd, the Divi blockchain network will undergo a dramatic change, like a butterfly coming out of its chrysalis. The great majority of node owners have spent the time upgrading their nodes, either by simply using vaults in the Divi wallet, staking or using a vault in the latest Desktop wallet, or upgrading their command line nodes and vaults.

To be crystal clear, if you have not upgraded your node or vault by the time of this fork, you will not break anything, your funds are safe. The only thing you have compromised is your ability to continue to earn. You will no longer be staking real Divi. You simply need to upgrade to the latest versions and you will be back on track!

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New Blockchain Rewards Distribution

There have been many articles about the result of the evolution to Divi 3.0. The biggest financial impact to you comes from the removal of masternodes. It may seem pretty obvious to some people, but to crystallize the effect of this, let’s get into the details. 

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The Original Distribution

Since its inception on September 27, 2018, the Divi blockchain has consistently generated one block per minute, lauding both stakers and masternode operators for their commitment to the blockchain.

The economic disbursement has been as follows:
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        - Masternodes: 45%

        - Staking: 38%

        - Development and Marketing: 9%

        - Exchanges, Liquidity, Platform Support: 7%

        - Charity: 1%

Moreover, an additional 50 DIVI per block was earmarked for the lottery.

Masternode and staking rewards were regularly generated and distributed with each block. This distribution has been true since the start regardless of the total block reward. In contrast, the remaining rewards were allocated in each block, but minted weekly, namely in:
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         - The superblock (treasury/charity), every 10,080 blocks.

         - The Lottery block, every 10,080 blocks.

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The Divi 3.0 Distribution

The overall inflation of the Divi economy will go unchanged. That means that the day before the fork, the block reward given out every minute, is 950 Divi. The day after the fork, indeed, 950 Divi will also be the block reward (a number that drops each year going forward until 2029). However, how that block reward is distributed is very different since Masternodes no longer exist and thus, can’t be rewarded. Let’s take a look at the difference.
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Upon the retirement of Masternodes on August 23rd, Validators, acting as stakers, will fully enjoy the fruits of their labor by retaining the entirety of the block rewards they generate. No longer will they have to part with a share for the Masternodes. This pivotal change reinforces the value and trust placed in the Validators’ efforts to strengthen the blockchain—a contribution that, in reflection, was not wholly achieved by the Masternodes.

A crucial consideration is that the funds previously locked in retiring Masternodes will likely shift to staking. This might lead to larger rewards, but potentially distributed at less frequent intervals. While the immediate effects of this shift may be nuanced, various factors will inevitably impact the Rate of Return and how it's calculated. We'll delve deeper into this in an upcoming article.

We can also zoom out a little bit and take a look:
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Above, you can see that up until Aug 23, 2023 the old, ‘masternode included’, rewards system is in place, but at 12:00:00 GMT of that day, (approximately block height 2580163), the new system goes in place. That inflation rate continues, up until October, at which time the inflation rate makes its normal annual decline, but Validators take all the node rewards.

Now you have a full understanding of how the block reward distribution works. The next article on the topic of the new rewards system will focus on your expected return rate.

Happy Staking!

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This article is part of a series of articles regarding the migration to Divi 3.0. It will be executed in steps over several weeks, allowing for a seamless and efficient transition process. We urge you to pay close attention to the forthcoming updates, as they will contain vital instructions for the migration. There will be a gamification element incorporated, so we encourage you all to stay engaged! This should make the process more engaging and a rewarding experience for all node owners and the Divi family. You can find the introduction article as well as the list of articles of the series on this link.

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