Reward Bearing

The reward-bearing mechanism of spSEI:

• Exchange Ratio: The value of spSEI is determined by the exchange ratio, which is calculated as (Staked Sei + Buffer Sei + Pending Sei) divided by the Total spSEI.

• Staked Sei: The portion of SEI that is actively staked with validators to earn rewards.

• Buffer Sei: The liquid SEI held in the buffer pool, enabling instant withdrawals.

• Pending Sei: SEI that is in transition, such as being processed for staking or withdrawal.

• Auto Compound Reward: All staking rewards are automatically compounded back into the pool, increasing the total SEI assets (the numerator), which in turn raises the exchange ratio.

Key Points:

• By simply holding spSEI, users benefit from auto-compounding—rewards are automatically reinvested, and the exchange ratio increases over time.

• As the exchange ratio grows, each spSEI represents more SEI, so all holders share the rewards proportionally.

• This makes spSEI a true reward-bearing asset: you earn yield automatically just by holding it, with no need for manual claiming or restaking.