Yield & LP Rewards

Sustainable yield and sustainable LP rewards

Single-stake and LP-stake nuMoney for sustainable, real yield

The numa protocol is able to pay sustainable, real yield to both nuMoney LP stakers and single-stakers of nuMoney synthetics. nuMoney LP stakers are those who contribute to a pool such as nuGOLD/rETH, while single-stakers would be staking nuGOLD by itself. This yield comes from two different sources: (1) vault fees, and (2) LST-yield. (1) In each vault transaction—whether burn or mint—there is a 1% fee that is sent to a wallet that accrues fees. (2) The rETH token represents staked ETH that accrues value at about 3-4% annually; at some interval, the protocol extracts rETH from the vault that represents the value accrued. Both (1) and (2) are pooled and distributed to nuMoney LP stakers and single-stakers of nuMoney synthetics. Unlike other protocols which often reward LPs or single-stakers through unsustainable, "printed" tokens that inflate the supply and are limited in number, numa rewards are part of the protocol structure and are sustainable: they don't inflate the supply and can't run out.

How much yield might be expected? The vault launched on March 5th, 2024 and is accumulating yield at about 20% APR as of April 15th, 2024. This 20% APR represents yield accrued over the entire value of the vault, but it is actually distributed at a higher rate than this, since the entire vault value isn’t staked for rewards. We also expect to pay about two-thirds of the total rewards to LP stakers and the remaining third to single-stakers. So, how does this work?

  1. Let’s assume that the entire value of the vault (e.g., $1,000,000) is earning yield at the above rate of 20% APR.

  2. Of the $1,000,000, let’s say 30% represents outstanding nuMoney synthetics.

  3. Of that 30%, we can assume that maybe two-thirds is either single-staked or LP staked (20% of the total vault value).

  4. So, this means that the 20% APR accrued by the entire vault value would pay about 100% APR to the LP stakers and single-stakers.

  5. However, we need to adjust for the two-thirds ratio for LP stakers. So, that would mean ~133% APR for LP stakers and ~66% APR for single-stakers.

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