When I lock up my BTC in "PROVIDE", how is the 10% interest earned?

[Linnovations]

I was showing off my Incognito Mobile wallet to a good friend who has been in crypto a long time. I showed him the “PROVIDE” feature and how I was getting 10% interest earnt in PRV on my Bitcoin.

He asked me a great question “How are they earning the 10% to pay you in PRV?”
I was left speechless as I am not entirely sure.

Does the Core Team release the PRV from a treasury to pay for the interest?

An official answer from the Incognito Team would be great.

Thanks in advance.

[henno]

I’m also curious about it. Can anyone answer this?

[fredlee]

Magic?

As far as I understand the PRV you get is earned from mining (the Incognito team still operates the majority of the nodes), which in reality is diluting the PRV value if you exchange it. Please, correct me if I’m wrong.