diff --git a/common/cosmwasm-smart-contracts/contracts-common/src/types.rs b/common/cosmwasm-smart-contracts/contracts-common/src/types.rs
index 320212143d..e9b399c02e 100644
--- a/common/cosmwasm-smart-contracts/contracts-common/src/types.rs
+++ b/common/cosmwasm-smart-contracts/contracts-common/src/types.rs
@@ -47,6 +47,14 @@ impl Percent {
         self.0 == Decimal::zero()
     }
 
+    pub fn zero() -> Self {
+        Self(Decimal::zero())
+    }
+
+    pub fn hundred() -> Self {
+        Self(Decimal::one())
+    }
+
     pub fn from_percentage_value(value: u64) -> Result<Self, ContractsCommonError> {
         Percent::new(Decimal::percent(value))
     }
diff --git a/common/cosmwasm-smart-contracts/mixnet-contract/src/msg.rs b/common/cosmwasm-smart-contracts/mixnet-contract/src/msg.rs
index ee172a4c20..c2046af9b0 100644
--- a/common/cosmwasm-smart-contracts/mixnet-contract/src/msg.rs
+++ b/common/cosmwasm-smart-contracts/mixnet-contract/src/msg.rs
@@ -31,6 +31,7 @@ pub struct InitialRewardingParams {
     pub initial_reward_pool: Decimal,
     pub initial_staking_supply: Decimal,
 
+    pub staking_supply_scale_factor: Percent,
     pub sybil_resistance: Percent,
     pub active_set_work_factor: Decimal,
     pub interval_pool_emission: Percent,
@@ -51,6 +52,7 @@ impl InitialRewardingParams {
             interval: IntervalRewardParams {
                 reward_pool: self.initial_reward_pool,
                 staking_supply: self.initial_staking_supply,
+                staking_supply_scale_factor: self.staking_supply_scale_factor,
                 epoch_reward_budget,
                 stake_saturation_point,
                 sybil_resistance: self.sybil_resistance,
diff --git a/common/cosmwasm-smart-contracts/mixnet-contract/src/reward_params.rs b/common/cosmwasm-smart-contracts/mixnet-contract/src/reward_params.rs
index fc543a3c02..73459f42d9 100644
--- a/common/cosmwasm-smart-contracts/mixnet-contract/src/reward_params.rs
+++ b/common/cosmwasm-smart-contracts/mixnet-contract/src/reward_params.rs
@@ -26,6 +26,11 @@ pub struct IntervalRewardParams {
     #[cfg_attr(feature = "generate-ts", ts(type = "string"))]
     pub staking_supply: Decimal,
 
+    /// Defines the percentage of stake needed to reach saturation for all of the nodes in the rewarded set.
+    /// Also known as `beta`.
+    #[cfg_attr(feature = "generate-ts", ts(type = "string"))]
+    pub staking_supply_scale_factor: Percent,
+
     // computed values
     /// Current value of the computed reward budget per epoch, per node.
     /// It is expected to be constant throughout the interval.
diff --git a/common/cosmwasm-smart-contracts/mixnet-contract/src/rewarding/simulator/mod.rs b/common/cosmwasm-smart-contracts/mixnet-contract/src/rewarding/simulator/mod.rs
index bd4fc8d8d3..5fe1c46175 100644
--- a/common/cosmwasm-smart-contracts/mixnet-contract/src/rewarding/simulator/mod.rs
+++ b/common/cosmwasm-smart-contracts/mixnet-contract/src/rewarding/simulator/mod.rs
@@ -40,7 +40,12 @@ impl Simulator {
         if self.interval.current_interval_id() + 1 == updated.current_interval_id() {
             let old = self.system_rewarding_params.interval;
             let reward_pool = old.reward_pool - self.pending_reward_pool_emission;
-            let staking_supply = old.staking_supply + self.pending_reward_pool_emission;
+            let staking_supply = old.staking_supply
+                + self
+                    .system_rewarding_params
+                    .interval
+                    .staking_supply_scale_factor
+                    * self.pending_reward_pool_emission;
             let epoch_reward_budget = reward_pool
                 / Decimal::from_atomics(self.interval.epochs_in_interval(), 0).unwrap()
                 * old.interval_pool_emission.value();
@@ -51,6 +56,7 @@ impl Simulator {
                 interval: IntervalRewardParams {
                     reward_pool,
                     staking_supply,
+                    staking_supply_scale_factor: old.staking_supply_scale_factor,
                     epoch_reward_budget,
                     stake_saturation_point,
                     sybil_resistance: old.sybil_resistance,
@@ -209,6 +215,7 @@ mod tests {
                 interval: IntervalRewardParams {
                     reward_pool: Decimal::from_atomics(reward_pool, 0).unwrap(), // 250M * 1M (we're expressing it all in base tokens)
                     staking_supply: Decimal::from_atomics(staking_supply, 0).unwrap(), // 100M * 1M
+                    staking_supply_scale_factor: Percent::hundred(),
                     epoch_reward_budget,
                     stake_saturation_point,
                     sybil_resistance: Percent::from_percentage_value(30).unwrap(),
@@ -537,6 +544,7 @@ mod tests {
             interval: IntervalRewardParams {
                 reward_pool: Decimal::from_atomics(reward_pool, 0).unwrap(),
                 staking_supply: Decimal::from_atomics(staking_supply, 0).unwrap(),
+                staking_supply_scale_factor: Percent::hundred(),
                 epoch_reward_budget,
                 stake_saturation_point,
                 sybil_resistance: Percent::from_percentage_value(30).unwrap(),
diff --git a/contracts/mixnet/src/contract.rs b/contracts/mixnet/src/contract.rs
index 1e91323c6c..af41f50b83 100644
--- a/contracts/mixnet/src/contract.rs
+++ b/contracts/mixnet/src/contract.rs
@@ -497,6 +497,7 @@ mod tests {
             initial_rewarding_params: InitialRewardingParams {
                 initial_reward_pool: Decimal::from_atomics(100_000_000_000_000u128, 0).unwrap(),
                 initial_staking_supply: Decimal::from_atomics(123_456_000_000_000u128, 0).unwrap(),
+                staking_supply_scale_factor: Percent::hundred(),
                 sybil_resistance: Percent::from_percentage_value(23).unwrap(),
                 active_set_work_factor: Decimal::from_atomics(10u32, 0).unwrap(),
                 interval_pool_emission: Percent::from_percentage_value(1).unwrap(),
@@ -535,6 +536,7 @@ mod tests {
             interval: IntervalRewardParams {
                 reward_pool: Decimal::from_atomics(100_000_000_000_000u128, 0).unwrap(),
                 staking_supply: Decimal::from_atomics(123_456_000_000_000u128, 0).unwrap(),
+                staking_supply_scale_factor: Percent::hundred(),
                 epoch_reward_budget: expected_epoch_reward_budget,
                 stake_saturation_point: expected_stake_saturation_point,
                 sybil_resistance: Percent::from_percentage_value(23).unwrap(),
diff --git a/contracts/mixnet/src/rewards/helpers.rs b/contracts/mixnet/src/rewards/helpers.rs
index 02cdf83e68..894c260e6f 100644
--- a/contracts/mixnet/src/rewards/helpers.rs
+++ b/contracts/mixnet/src/rewards/helpers.rs
@@ -20,7 +20,8 @@ pub(crate) fn apply_reward_pool_changes(
 
     let reward_pool = rewarding_params.interval.reward_pool - pending_pool_change.removed
         + pending_pool_change.added;
-    let staking_supply = rewarding_params.interval.staking_supply + pending_pool_change.removed;
+    let staking_supply = rewarding_params.interval.staking_supply
+        + rewarding_params.interval.staking_supply_scale_factor * pending_pool_change.removed;
     let epoch_reward_budget = reward_pool
         / Decimal::from_atomics(interval.epochs_in_interval(), 0).unwrap()
         * rewarding_params.interval.interval_pool_emission;
diff --git a/contracts/mixnet/src/support/tests/mod.rs b/contracts/mixnet/src/support/tests/mod.rs
index 07b89671cd..a7cf4a3875 100644
--- a/contracts/mixnet/src/support/tests/mod.rs
+++ b/contracts/mixnet/src/support/tests/mod.rs
@@ -768,6 +768,7 @@ pub mod test_helpers {
         InitialRewardingParams {
             initial_reward_pool: Decimal::from_atomics(reward_pool, 0).unwrap(), // 250M * 1M (we're expressing it all in base tokens)
             initial_staking_supply: Decimal::from_atomics(staking_supply, 0).unwrap(), // 100M * 1M
+            staking_supply_scale_factor: Percent::hundred(),
             sybil_resistance: Percent::from_percentage_value(30).unwrap(),
             active_set_work_factor: Decimal::from_atomics(10u32, 0).unwrap(),
             interval_pool_emission: Percent::from_percentage_value(2).unwrap(),