Avalanche Value Accrual

About this model

A simulation of value flow between Avalanche stakeholders

This diagram represents a system designed to illustrate the flow of value across various nodes staking AVAX tokens on the Avalanche network, focusing primarily on the dynamics of staking rewards and their distribution. At its core, the system is divided into several zones, each responsible for different aspects of the staking process, such as the "Staking Zone" for token holders engaging in staking activities and the "Reward Zone" where staking rewards are calculated and distributed. A unique feature of this model is the inclusion of varying fees associated with different validators, highlighting the impact of fee structures on the overall rewards distributed to delegators and validators alike.

The system employs a multitude of pools, each representing different validators and delegators with specific fee rates, from which resources are funneled into the circulating supply, simulating monthly rewards distributions. Gates are used strategically to control the flow of resources based on conditions such as time intervals, simulating the passage of months. Registers calculate the total stakes and rewards shares, further detailing the resource allocation amongst various participants in the network. Various assumptions such as a fixed staking growth rate and an annual percentage yield (APY) are factored into the design to abstract and simplify the complex interactions within the Avalanche staking ecosystem. This model not only visualizes the accumulation and distribution of staking rewards but also emphasizes the effects of validator fees and the allocation of rewards to the circulating supply, offering insights into the value accrual mechanisms within the Avalanche network.

“Avalanche Value Accrual” is a public Machinations diagram by Success D. Ndu, shared in the Machinations Community.

You can open the original diagram in the Machinations app, press Play to watch how resources move through it, and change its values to see how the system responds. Machinations is a visual tool for designing, simulating and balancing game economies and other systems, where resources flow through sources, pools, drains, converters and gates. In a diagram, a source creates resources, a pool stores them, a drain removes them, a converter changes one resource into another and a gate decides where they go next.