Early Exit Penalties
To maintain fairness, protect the Rewards Pool, and discourage speculative behavior, Axynom applies structured penalties to users who attempt to withdraw their staked AXY before the completion of their chosen lock period.
The early exit system is designed to create clear consequences without being punitive. It respects user autonomy while prioritizing the sustainability of staking rewards for committed participants.
Penalty Structure
The penalty is proportional to how much of the lock period has been completed at the time of withdrawal.
There are two penalty tiers:
Less than 66% completed
50%
High penalty for exiting before major commitment
66% to 99% completed
34%
Reduced penalty as user approaches full maturity
If a user exits before completing 66% of their lock period, 50% of their pending rewards are forfeited.
If a user exits after completing 66%, but before full maturity, 34% of their pending rewards are forfeited.
The penalty applies only to pending rewards, not the principal staked amount. Users always recover their full original deposit.
Destination of Penalties
Forfeited rewards are not burned or returned to the general Rewards Pool. Instead, they are redirected to the Treasury Pool, where they can be:
Recycled into new contributor campaigns
Used for platform development
Held for future staking boosts or incentive experiments
This structure ensures that penalties actively contribute to the protocol’s growth, rather than simply being lost.
Example
If a user locks 10,000 AXY for 1 year (12% APY) and tries to exit after 5 months:
5 months represents roughly 41% of the lock period.
Penalty applied: 50% of pending rewards forfeited.
The user recovers 100% of their principal and 50% of earned rewards up to that point.
The other 50% is redirected to the Treasury.
If the same user exits after 9 months:
9 months represents 75% of the lock period.
Penalty applied: 34% of pending rewards forfeited.
The structure fairly rewards near-completion while still discouraging short-term farming strategies.
Strategic Role of Penalties
Early exit penalties serve multiple important functions:
Preserve reward sustainability for committed users
Discourage speculative, fast-exit behavior
Strengthen the Treasury without needing new token issuance
Align incentives between users, contributors, and the broader protocol
They are not intended to trap participants, but to enforce the logic that long-term commitment deserves greater rewards.
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