# 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% \* 85% = $15,300 and allocated to stUSR and RLP proportionately to their TVL;
* Risk Premium is calculated as $20,000 \* 90% \* 15% = $2,700 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.

<table><thead><tr><th width="137.31640625"></th><th width="310.3984375">Amount</th><th>stUSR Portion</th><th>RLP Portion</th></tr></thead><tbody><tr><td>Base Reward</td><td>[$20,000 * 90%] * 85% = $15,300</td><td>$10,710</td><td>$4,590</td></tr><tr><td>Risk Premium</td><td>[$20,000 * 90%] * 15% = $2,700</td><td>$0</td><td>$2,700</td></tr><tr><td>Protocol Fees</td><td>$20,000 * 10% = $2,000</td><td>-</td><td>-</td></tr><tr><td><strong>Total</strong></td><td><strong>$20,000</strong></td><td><strong>$10,710</strong></td><td><strong>$7,290</strong></td></tr></tbody></table>

<div data-full-width="false"><figure><img src="/files/beid2EWqqaHGGcyITtoH" alt=""><figcaption><p>Example 1. Reward epoch with a $20,000 profit.</p></figcaption></figure></div>

#### 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.

<figure><img src="/files/0xlc6PvkVgf2XXEey3k1" alt=""><figcaption><p>Example 2. Reward epoch with a $20,000 loss.</p></figcaption></figure>


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