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Emissions in Our DeFi Ecosystem

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What Are Emissions?

Emissions are additional token rewards distributed to users who participate in various activities within our DeFi platform. They are a key component of our tokenomics model, designed to incentivize specific behaviors and distribute the platform’s native token (RETRO) over time.

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Key Components of Our Emission System

  1. ve3,3 (Vote Escrowed 3,3): The backbone of our governance and incentive structure.
  2. Gauges: Mechanisms for distributing rewards to different liquidity pools.
  3. Merkl: An efficient reward distribution system developed by Angle Protocol.

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How Emissions Are Calculated

Emissions in our platform are calculated based on several factors:

  1. Total Emission Rate: The overall rate at which new RETRO tokens are minted and distributed.
  2. Gauge Weights: Determined by ve3,3 token holder votes, affecting how emissions are distributed among different pools.
  3. User’s Liquidity: The amount of liquidity a user provides to a specific pool.
  4. Lock Duration and Amount: For ve3,3 token holders, longer locks and higher amounts increase emission rewards.
  5. Boost Factor: Additional multiplier based on a user’s ve3,3 position.

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Emission Calculation Formula

User Emissions = Base Emission Rate * Gauge Weight * User Liquidity Share * Boost Factor

Where:

  • Base Emission Rate: Set by governance
  • Gauge Weight: Determined by ve3,3 voting
  • User Liquidity Share: User’s liquidity / Total pool liquidity
  • Boost Factor: Based on user’s ve3,3 position (1x to 2.5x)

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What Emissions Are Based On

Emissions in our platform are based on:

  1. Protocol Parameters: Set by governance, including total emission rate and distribution schedules.
  2. User Activity: Including liquidity provision, token locking (ve3,3), and participation in governance.
  3. Market Dynamics: Gauge weights change based on community voting, reflecting market demand for different pools.
  4. Time: Emissions often follow a decay schedule, reducing over time to create long-term sustainability.

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How to Read Emissions for a Given User

To read emissions for a specific user:

  1. Check User’s Positions:

    • Liquidity provided in different pools
    • ve3,3 lock amount and duration

  2. Gauge Information:

    • Current gauge weights for relevant pools
    • Total liquidity in each pool

  3. Use Merkl for Efficient Calculations:

    • Merkl handles complex reward calculations and distributions

This call would return an object containing:

  • Claimable emissions
  • Emission rate (tokens per second/day)
  • Boost factor applied

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Reading Emissions on Frontend:

  1. Display total claimable emissions across all pools
  2. Show emission rates for each pool the user is participating in
  3. Indicate the user’s current boost factor
  4. Provide a breakdown of emissions sources (e.g., liquidity mining, ve3,3 rewards)

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Factors Affecting User Emissions

  1. Changing Gauge Weights: As ve3,3 holders vote, pool emission allocations change.
  2. User’s ve3,3 Position: Increasing lock amount or duration can boost emissions.
  3. Pool Liquidity Changes: As total liquidity in a pool changes, individual share and emissions adjust.
  4. Protocol-Wide Changes: Governance decisions can affect overall emission rates or distribution mechanisms.