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Within DeFi, early unlock fees are a common mechanism designed to motivate users to remain engaged with the ecosystem. In the context of Metronome, should users opt to unlock their $MET tokens before the end of their designated lock-up period, they would incur an early unlock fee. This penalty initiates at 50% and decreases in a linear fashion as time elapses, reaching 0% by the end of the lock-up period. Any fees amassed from this penalty are redirected to the Metronome DAO Treasury. This is a systematic release, adhering to the following conditions:
Penalty: If users choose to unlock their tokens early, they will face a penalty determined by the linear decaying formula up until their original unlock period ends. Essentially, the longer a user waits into their lockup period, the smaller the penalty will be when withdrawing.
Let's say you locked your $MET for 1 year, but after 6 months, you decide to withdraw them early.
Given the penalty decreases linearly from 50% to 0% over the course of the lock duration (1 year in this case), at the halfway point (6 months), your penalty would be 25%.
If you had locked 100 $MET, you'd pay 25 $MET as a penalty for unlocking them early.