Vesting

Rewards allocated to the following protocols incentive programs are subject to a vesting mechanism:

• Staking $KOLAB

• Kolabee fees

NFT staking and Referral rewards are not subject to rewards vesting and are paid out in $KOLAB tokens directly as opposed to mKOLAB.

The rewards vesting mechanisms works as follows:

• Rewards are initially paid out in the form of mKOLAB, these rewards can be converted into $KOLAB anytime at a ratio determined by the time-lock penalty.

• The time-lock penalty decays until a full 12 month period elapses. At this point mKOLAB becomes $KOLAB at a 1:1 ratio.

• Time-locked mKOLAB is considered staked and will continue to accrue additional rewards until the user claims into $KOALB or after the 12 month time-lock period has elapsed.

• For $KOLAB stakers, their mKOLAB rewards will be compounded directly into their mKOLAB staking positions. Note that mKOLAB earned as rewards will be converted back to $KOLABin a manner that is separate than the principal mKOLAB that was minted through $KOLAB staking directly.

• Time-locked mKOLAB rewards are equivalent to mKOLAB minted via the $KOLAB staking mechanism in the context of VIP tiers qualification.

• Users can claim their mKOLAB into $KOLAB at any time, however they will incur conversion penalties of up to a 97% loss (if within 1st month) versus holding for the entire period. The penalty decays using a quadratic formula, therefore the user's rewards become exponentially larger the longer they wait. Full time-lock penalty schedule is below:

mKOLAB Rewards Time-lock (Months)	% Recieved in form of $KOLAB
0	3
1	4
2	5.5
3	7.5
4	10
5	13.5
6	18
7	24
8	32
9	42
10	56.5
11	75
12	100