Calculation Example
Reward distribution mechanism allows both stUSR and RLP benefit from collateral pool income. Losses are attributed to RLP.
For the calculation example, suppose $100,000 were deposited into the protocol, with $70,000 into USR and $30,000 into RLP.
Example 1. Reward epoch profit
Over the course of a reward epoch, collateral pool realizes $20,000 profit. In this example, both stUSR and RLP share a portion of increase in TVL.
Base Reward is calculated as $20,000*70%=$14,000 and allocated to stUSR and RLP proportionately to their TVL;
Risk Premium is calculated as $20,000*30%=$6,000 and allocated to RLP.
The table below shows calculation of how the profit is attributed.
Example 2. Reward epoch loss
Over the course of a reward epoch, collateral pool realizes $20,000 loss. In this example:
Full amount of loss is allocated to RLP. Its value decreased by $20,000;
No distributions are made to stUSR.
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