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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