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The first yield farming platform in the industry based on Vote Escrow mechanism.
The TETU V2 platform features a voting system for the distribution of TETU rewards. This allows veTETU holders to vote for different vaults, and the system distributes TETU rewards to the vaults based on these votes. Vault liquidity providers have the opportunity to offer incentives or "bribes" to voters to attract more profit for their assets. This generates additional income for veTETU holders.
Every week, the available amount of TETU tokens is loaded into the Voter contract. Additionally, all buybacks for vaults are also transferred to the Voter contract. This means that a portion of the strategy profit does not go directly to the vault, but is under the control of veTETU holders.
Through this voting system, veTETU holders have full control over all attributes of the Tetu platform. This allows them to make informed decisions and have a direct impact on the distribution of rewards and the direction of the platform. The ability to control these attributes is a key feature of the veTETU platform, giving holders a significant level of autonomy and empowerment.
Tetu platform attributes will be fully under the control of veTETU holders, allowing them to make informed decisions and have a direct impact on the platform's direction and the distribution of rewards.
There is a compound ratio system for each strategy to divide strategy profits into two parts: auto-compounded and non-compounded.
The auto-compounded profit will be immediately added to the linked vault. By default, the compounded part of each strategy is set at 0%. This allows for flexibility in the amount of profit that is automatically added to the vault.
The non-compounded profit will be transferred to the ForwarderV3 contract, where it will be periodically sold to TETU. The TETU amount will then be divided in three different directions:
- 1.The first portion will be allocated to InvestFund.
- 2.The second portion will be transferred to the TetuVoter, where it will be distributed to gauges based on votes.
- 3.The remaining amount will go to VeDistributor and will be distributed weekly to veTETU holders.
While the distribution of rewards is scheduled on a weekly basis, earnings are generated in real-time. The one-week timeframe merely represents the gap between the earning of strategy rewards and their subsequent distribution.
For example, if a strategy earns 100 USDC for the underlying asset of WMATIC, and based on votes, the compounded part is set at 50%. 50 USDC will be sold to buy WMATIC for the vault, allowing users to receive their profits immediately. The remaining 50% will go to ForwarderV3.
In this scenario, ForwarderV3 would now have 50 USDC. Based on votes, the InvestFund ratio is set at 10% and the Gauge ratio is set at 30%. The 50 USDC would be sold to TETU, resulting in, for example, 10,000 TETU. 1000 TETU would then be transferred to the InvestFund (10%), leaving 9000 TETU. 2700 TETU would be transferred to TetuVoter to be distributed to gauges based on votes. The remaining 6300 TETU would be transferred to VeDistributor to be distributed to veTETU holders.
This system allows for a customizable approach to strategy profits, giving veTETU holders control over how the profits are distributed and invested.
Tetu's Boosted Rewards system allows liquidity providers to earn even more rewards through the use of the platform's native token, veTETU. By connecting veTETU to any vault, users can receive a boost in their rewards, with the potential for even greater rewards as the amount of veTETU power held increases.
Similar to other protocols such as Curve, Solidly, and Dystopia, Tetu's boost system operates on a zero-sum game principle. The total amount of rewards remains the same, but the boost allows for an increase in a user's "virtual" total value locked (TVL), resulting in a higher profit. Yet, it's worth noting that as more users in the vault utilize the boost, the overall profit for each user decreases.
Getting the maximum boost is practically impossible. The final profit earned by a user will depend on the amount of veTETU power other users have.
The boost is calculated by combining a user's default virtual balance (40% of their real balance) with a bonus virtual balance, which is determined by the user's veTETU power to the total veTETU power staked. For example, if a user deposited 100 USDC into the gauge with a total staked USDC of 1000, their default virtual balance would be 40 USDC. If they also held 1 000 000 veTETU power out of a total 10 000 000, they would receive a bonus virtual balance of 90 USDC (10% of the gauge supply). This would result in a virtual balance of 130 USDC.
The final profit for a user will depend on the amount of veTETU power held by other users in the vault. By utilizing the boost system, liquidity providers have the potential to earn even more rewards through their participation in Tetu's liquidity pools.