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 * 90 * 70% = $12,600 and allocated to stUSR and RLP proportionately to their TVL;
Risk Premium is calculated as $20,000 * 90% * 30% = $5,400 and allocated to RLP.
Protocol takes fees as $20,000 * 10% = $2,000.
The table below shows the calculation of how the profit is attributed.
Base Reward
[$20,000 * 90%] * 70% = $12,600
$5,040
$7,560
Risk Premium
[$20,000 * 90%] * 30% = $5,400
$0
$5,400
Protocol Fees
$20,000 * 10% = $2,000
-
-
Total
$20,000
$5,040
$12,960
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.
No protocol fees are taken because the collateral pool realizes a loss.
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