mastercoin-MSC/spec — pull request #13 by DavidJohnstonCEO (2013-12-20 08:02:26+00:00)
Title: Standard Dev MSC Distribution Rate Algorithm

After much discussion on the forums and the holding of a community poll 73.5% agreed that a "Standard Dev MSC Distribution Rate Algorithm" should be added to the Master Protocol Spec and that the Distribution Algorithm should take the form as described below.

Link to back ground and context: https://bitcointalk.org/index.php?topic=348028.0

Summary of Additional Distribution Rate language for the Spec.

2. Standard Distribution Rate Algorithm: The distribution of "Dev MSC", mirrors the amount of Dev MSC generated each 30.41 days. Further more these Dev MSC are distributed in proportion to the amount of BTC won by participants in Mastercoin development bounties completed during that 30.41 day period. The intension being, that the Mastercoin Foundation will handle this distribution process temporarily until its operation can be transferred to the Mastercoin community via the Distributed Bounty system and the Proof of Stake consensus mechanism. During the temporary period of the Mastercoin Foundation distributing the Dev MSC 50% of the normal distribution rate shall apply. When the Mastercoin community begins handling the Distribution of the Dev MSC all undistributed Dev MSC from the pervious period shall be transferred to the Decentralized system and consensus must be reached on the standard distribution rate algorithm for the new period going forward.

Simple Dev MSC Distribution Equation: A / B = C * D = E
(A) Amount of awards an individual earns in BTC during a 30.41 day period, divided by,
(B) the total amount of BTC awarded during that 30.41 day period, equals
(C) his or her individual award percentage, times
(D) the total Dev MSC generated during that 30.41 day period, equals
(E) the amount of Dev MSC awarded to the individual in addition to his BTC awards during the 30.41 day period.

Example #1 (using round numbers):
A (100 BTC) / B (1,000 BTC) = C (10%) * D (1,000 MSC) = E (100 MSC)

There are 56,316 Dev MSC that will ever be generated.
28,158 Dev MSC will be generated the first year or 2,346 MSC each 30.41 day period.
So if a developer won 10% of the bounties during this 30.41 day period he or she would be distributed 234.6 Dev MSC.