Source: [Competitions](https://sapio.network/docs/competitions)

# Competitions

A competition links a proposed reserve change to later performance evaluation.

Before entry, the protocol fixes eligible assets, reference prices, and competition rules. The reference prices stay fixed for that competition.

Proposers lock SAPIO behind eligible assets. Their combined stake sets a bounded target. The system benchmark represents the existing reserve.

Settlement determines how much of the target becomes a reserve change. Later checkpoints compare prices with the fixed reference prices and determine SAPIO payouts.

The timing follows the announced rules. Earlier competitions can continue to receive payouts after a new competition starts.

The illustration below shows target influence and relative payouts. Its payout bars cover the first eight release events. The totals cover the full release schedule.

It omits public fills, delivery, defaults, multiple proposer positions, and price failures. It is not a live competition or a forecast.

## The three phases

### 1. Stake

Proposers enter during the announced window. Their stakes set a bounded target within the eligible assets.

The protocol creates purchase instructions when entry closes. Each proposer receives a maximum responsibility for their asset's remaining instruction.

See [Stake](https://sapio.network/docs/stake.md).

### 2. Settle

Public sellers can supply each instructed asset at its quote. They receive newly issued SRT.

After the public window, proposers must supply their assigned remainder. Undelivered shares lose reward eligibility and can face the configured confiscation penalty.

Settlement payments do not change the fixed reference prices used for scoring. Unfilled instructions do not count as completed purchases.

See [Settle](https://sapio.network/docs/settle.md).

### 3. Redistribute

Finalization fixes the eligible positions and the SAPIO pool. Later checkpoints score those positions and the system benchmark under the same performance rule.

The protocol releases SAPIO in slices. The rules set a minimum fraction for each release event. They do not guarantee a fixed payment date.

See [Redistribute](https://sapio.network/docs/redistribute.md).

## Limits

Movement limits constrain one competition. They do not prove that repeated competitions create an optimal reserve.

Prices, participation, delivery, market liquidity, and contract execution affect the result. See [Security](https://sapio.network/docs/security.md) for the assumptions and risks.