PIVX See-Saw Mechanism which PRCY is based on.
On the PRCY network, both staking nodes and Masternode operators receive PRCYcoins as a reward for helping to secure the network. The distribution of PRCY between staking nodes and Masternode operators are governed by PRCY’s ‘See-Saw Mechanism’.
The rationale behind the See-Saw Mechanism is to achieve fairness in the distribution of PRCY coins between staking nodes and Masternodes.
In other cryptocurrency systems that make use of second-tier Masternodes, block rewards are divided equally between mining/staking nodes (depending on the consensus algorithm) and Masternodes. However, this attempt at a fair reward distribution can be undermined by the monopolization of Masternodes. Masternodes that are held by just a few large investors could lead to the subsequent centralization of underlying budgeting systems. Moreover, such a disparity in the reward distribution between monopolized Masternodes and staking/mining nodes could result in a reduction in the number of users willing to secure the network.
PRCY’s See-Saw Mechanism is designed to prevent this scenario, by rewarding actors critical to the operation of the PRCY ecosystem in an equitable manner.
The PRCY See-Saw Mechanism promotes an even ratio between staking nodes and Masternodes on the network by dynamically adjusting the block reward. The See-Saw Mechanism constantly adjusts the amount of rewards that go toward the two groups based on the number of staking nodes and Masternodes that are operating on the network at a given time. For example, the higher the number of Masternodes operating on the network, the smaller the reward that will be paid out to Masternode operators. Conversely, if the count of Masternodes on the network decreases, then the block reward apportioned to Masternode operators will increase. This same mechanism also applies to the count of staking nodes on the PRCY network.