DUST Incentives

The DUST Incentives System distributes protocol rewards to users who participate in Neverland’s lending markets and governance.

Rewards are generated continuously from supplying and borrowing activity across the protocol and are allocated transparently through the emission controller.

This system is designed to strengthen user participation in both the lending markets and governance, rewarding those who contribute liquidity or maintain long-term commitment through veDUST.

Overview

Every market in Neverland is connected to the DustRewardsController, which tracks reward emissions and accruals for each user based on their supply and borrow balances.

The system continuously distributes DUST to active participants, aligning incentives for suppliers, borrowers, and governance participants.

Emissions are not fixed — they scale with market activity and utilization. The more you contribute supplying or borrowing, the larger your share of rewards.

How Emissions Work

1. Emission Source

   DUST rewards are distributed across Neverland’s supply and borrow markets. Each supported asset has a defined emission rate, which determines how many DUST tokens are emitted per second to that pool. Supply and borrow emissions may differ based on governance settings or liquidity priorities.

2. Reward Accrual

   Rewards accrue automatically as users supply or borrow assets. The controller tracks each user’s share relative to total market activity.

3. Claiming Rewards

   Users can claim their accrued DUST rewards directly through the app. Upon claiming, users can decide how to handle their rewards: lock them into a new time-lock, add to an existing lock, create a permanent lock, or withdraw with a penalty for immediate liquidity.

Emissions are distributed fairly and proportionally to each user’s participation.

Claiming Options

Users can choose between several ways to handle their accumulated DUST rewards:

Claiming Flow

Each option is fully on-chain, with rewards distributed from the emissions vault through the DustRewardsController and DustLockTransferStrategy contracts.

Penalty Logic

When choosing direct transfer (claiming without locking), a penalty is applied to discourage short-term extraction. The default penalty is 50%, configurable by the protocol.

The user receives 50% of the claimed DUST as liquid tokens. The remaining 50% is sent to the Treasury, where it gets burned.

This structure aligns emissions with long-term participation and reduces circulating supply over time.

Integration with Governance

The DUST Incentives system works alongside veDUST governance:

Users who lock DUST as veDUST gain voting power and can decide how revenue is directed. Locked users also receive revenue rewards from the protocol’s governance revenue share.

Together, this creates a continuous flywheel between liquidity, governance, and emissions.

Key Characteristics

Activity-driven emissions: Rewards are generated directly from lending pool participation. Automatic accrual: Rewards accumulate seamlessly as users supply or borrow. Flexible claiming: Four claim options to match user preferences. Penalty-aligned: Direct claims reduce supply and strengthen token value. Governance-integrated: veDUST holders steer the protocol. Composable architecture: Designed to work across all Neverland markets.

Summary

DUST emissions are distributed to those who make Neverland function — suppliers, borrowers, and empowers governance participants. Every action in the protocol earns DUST rewards, and every claim choice influences both personal and ecosystem growth.

By combining activity-based emissions with veDUST governance, Neverland creates a sustainable incentive model that rewards liquidity, strengthens governance, and reinforces long-term alignment between users and the protocol.