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.

	Amount	stUSR Portion	RLP Portion
Base Reward	[$20,000 * 90%] * 85% = $15,300	$10,710	$4,590
Risk Premium	[$20,000 * 90%] * 15% = $2,700	$0	$2,700
Protocol Fees	$20,000 * 10% = $2,000	-	-
Total	$20,000	$10,710	$7,290

Example 1. Reward epoch with a $20,000 profit.

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.

Example 2. Reward epoch with a $20,000 loss.