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.
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### 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.
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### Claiming Options
Users can choose between several ways to handle their accumulated DUST rewards:
| Option | Description | Penalty | Ideal For |
|---|---|---|---|
| Create New Lock | Claim rewards into a new veDUST with a chosen duration (1 month – 1 year). | None | New governance participants |
| Add to Existing Lock | Add claimed rewards to an existing veDUST (extends commitment). | None | Users consolidating voting power |
| Create Infinite Lock | Claim rewards into a infinite veDUST (1:1 voting power, no decay). | None | Long-term governance holders |
| Direct Transfer | Claim as liquid DUST to your wallet. | 50% | Users needing liquidity |
Claiming Flow
Penalty Logic
When choosing **direct transfer** (claiming without locking), a penalty is applied to discourage short-term extraction. The 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.
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### 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**.
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### 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.
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### 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.