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-side stakers of nuMoney synthetics. nuMoney LP stakers are those who contribute to a liquidity pool such as nuGOLD/rETH, while single-side stakers would be staking $nuGOLD by itself.

This yield comes from two different sources:

Buy and Sell vault fees; and,
LST-yield.

(1) In each vault transaction — whether a buy or sell — 20% of the fee (1% nominal) is sent to a rewards contract that accrues these fees. (2) The vault is comprised of rETH tokens. rETH represents staked ETH that accrues ETH value at about 3-4% annually. At some interval, the protocol extracts rETH from the vault that represents the yield value accrued and sends it to the rewards contract.

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" token emissions 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?

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.
Of the $1,000,000, let’s say 30% represents outstanding nuMoney synthetics.
Of that 30%, we might assume that maybe two-thirds is either single-staked or LP staked (20% of the total vault value).
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.
However, we need to adjust for the two-thirds ratio for LP stakers. For single-stakers, this would be ~66% APR. For LP stakers, this would also mean ~66% APR, since they are earning ~133% APR on the nuMoney in the LP, which represents 50% of the position.

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Last updated 3 months ago

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

This yield comes from two different sources:

Buy and Sell vault fees; and,

LST-yield.

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.

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

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

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.

However, we need to adjust for the two-thirds ratio for LP stakers. For single-stakers, this would be ~66% APR. For LP stakers, this would also mean ~66% APR, since they are earning ~133% APR on the nuMoney in the LP, which represents 50% of the position.