The system is safest and most capital-efficient when 67% of SXP is bonded and 33% is staked in pools. At this point, nodes will be paid 67% of the System Income, and liquidity providers will be paid 33% of the income. The Sytem Income is the block rewards (blockReward = totalReserve / 6 / 6311390) plus the liquidity fees collected in that block.
An Incentive Pendulum ensures that liquidity providers receive 100% of the income when 0% is staked (inefficent), and 0% of the income when totalStaked >= totalBonded (unsafe). The Total Reserve accumulates the transactionFee, which pays for outgoing gas fees and stabilises long-term value accrual.
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