M^0

The M0 engineering team proposes upgrading the current Earner Rate Model to a less conservative variant. Under the new model, if the governance-set maximum Earner Rate is less than or equal to the Minter Rate and no deactivated Minters have caused the Total Active Owed M to become greater or equal to Total Earning Supply, the protocol actual Earner Rate will match the governance-set Earner Rate.

This adjustment is valid for the current state of the M0 Protocol and led to the minimal code changes in the Earner Rate Model smart contract compared to its previous version.

In the case when the desired Earner Rate is set above the Minter Rate or there were deactivations of Minters that have caused Total Active Owed M to become less than M Total Earning Supply, the core logic for calculating the Earner Rate remains unchanged. The safe Earner Rate continues to be determined by three key parameters: Total Active Owed M, Total Earning Supply, and the current Minter Rate. These inputs define an actual Earner Rate, which is capped by the TTG-set max Earner Rate as follows:

Actual Earner Rate = min(TTG-set Max Earner Rate, Rate Multiplier × Safe Rate).

The Rate Multiplier (set to 98% currently) adds a buffer to safeguard against potential rounding errors and approximations within the exponential and logarithmic functions applied in these calculations. Overall, the safe Earner Rate ensures that the $M paid to Earners does not exceed the $M charged to Minters.

All proposed changes have passed M0’s internal audit and proven safe by additional fuzz, invariant tests, and simulations. The new Earner Rate Model is deployed at 0x26d01A2c91f6529aD72d2C27a03d963CAb90dFfd as an immutable verified contract.