TETU tokens are minted on a weekly basis, 70% of emission dedicated to yield farming will be wrapped to xTETU and distributed between all current vaults. Check emissions details in tokenomics.
xTETU is the Interest Bearing TETU token. Tetu rewards are already distributed to the vaults in xTETU tokens, this means that xTETU are already earning income through TETU buybacks even if they are not claimed from the vaults. Interest bearing mechanics provide users with income through the constant share price increase in TETU of the interest bearing token, in this way the xTETU token will be worth more and more TETU over time.
Emissions rate to Profit Share can be from 0% ~ 100% this ratio split rewards into two directions - PS pool and liquidity provider vault. In general, the Profit Share does not receive incentives from emissions, if this occurred it would be an exception. So the emission rate split between Profit Share and Liquidity Provider Vaults generally are 100% in favor of Liquidity Provider Vaults.
As in the case of emissions there is also a split rate between 0% ~ 100% of yield farming rewards collected in the strategies that will be used to auto compound the underlying or buyback TETU on the market. Overall the rate is 100% in favor of buying TETU on the market. Thus Tetu works in such a way that all assets collected through Yield Farming are used to buyback TETU on the market and distribute it to xTETU holders, creating a Yield Farming mechanic that provides more stability to the Yield Farming of volatile assets and higher returns to the Yield Farming of stable assets. TETU bought back on the market are distributed to xTETU holders by increasing the TETU per share value of xTETU, this way the xTETU holder does not receive TETU separately, but receives it by the constant increment of the value of xTETU in relation to TETU.
The PS ratio determines what amount of TETU is sent back to the underlying vault or the distributed by the Profit Destination ratio.
Vaults that work in the standard strategy buyback TETU to distribute in the profit destination and auto compound the underlying vault in proportion to the current PS ratio.
Vaults that use the auto compounding strategies returns 90% or 99% of rewards from yield farming to auto compound the underlying vault and 10% or 1% of rewards are distributed by the Profit Destination ratio of 45% for xTETU, 45% for Protocol's Liquidity 10% USDC for investment fund.
Vaults that use the auto compounding strategies on Fantom return 90% of rewards from yield farming to auto compound the underlying vault and 10% of rewards are distributed again by a Profit Destination ratio specific to Fantom. Tetu on Fantom uses a different Profit Destination ratio, with 50% directed to Protocol Owned Liquidity and 50% directed to xTETU profit share.
Most vaults on Fantom distribute TETU incentives, these tokens are regular TETU and do not function as an interest bearing token. However it is possible to easily bridge TETU from Fantom to Polygon and deposit it in the Profit Share vault.
TETU buyback from the market is made regularly, and the time of buyback is determined randomly in order to avoid front running or weaknesses that allow exploits in this process. Due to a 100% buyback rate the TETU buy pressure can eventually become insane. As the TETU buyback is done using Yield Farming rewards from LP vaults, the most reliable source for projecting the amount of TETU buyback in the future is TVL at work. The high buyback rate of the TETU token plus its supply limit of 1 Billion TETU Tokens is expected to create an atmosphere of cyclical TETU scarcity in the market.
The Profit Destination ratio divides the profit generated between Profit Share, Protocol Owned Liquidity and Investment Fund. This effectively gives Tetu DAO some control over the emission and buyback rates of TETU. The proposal TIP-003 Protocol Owned Liquidity resulted in the following allocations:
45% buyback TETU to distribute to xTETU holders.
45% buyback TETU-USDC LP to protocol owned liquidity.
10% USDC for Investment Fund.
The Profit Destination ratio is applied directly to Standard Vaults and is always applied in all fee cases, i.e. all Yield farming fees collected from the vaults are distributed according to the Profit Destination ratio.
Tetu on Fantom uses a different Profit Destination ratio, with 50% directed to Protocol Owned Liquidity and 50% directed to xTETU profit share.
A portion of the fees generated by TetuSwap 's 0.1% trading fee will also be directed to the profit share xTETU vault, as allocated by the Profit Share PS ratio. 10% of the fees generated is compounded to its underlying LP, with the remaining 90% divided further by the Profit Destination ratio after the distribution of the PS ratio. The Profit Share also receives part of the Performance Fees generated from all Tetu Yield Farming vaults. Fees received vary by vault.
The performance of TETU buybacks can be checked on the Stats page.
Vaults Stats Strategies earned TETU: This is the total TETU bought back from the market. It is a good indicator of the Tetu protocol productivity.
Fund Keeper USDC Balance: This is the amount of USDC available in the investment fund.
Fund Keeper LP Balance: This is the Liquidity Owned by Tetu protocol.
10% of assets collected by Yield Farming from all vaults go to the Investment Fund. Assets earmarked for the Investment Fund will be used to make investments either in platforms and Defi dApps or investments in the real world if possible. Profits earned from the Investment Fund will be regularly distributed to dxTETU holders.
TETU is available for trading on QuickSwap on the pair TETU-USDC and on Sushiswap on the pair MATIC-TETU both on the Polygon network. You will get better prices in TETU trading if you use 1inch as through 1inch your order will be aggregated according to the best available liquidity.
An instructional video about xTETU, dxTETU and Vault Shares.
The liquidity generation performance of the protocol was excellent, within a few weeks after the DAO voting the protocol had already accumulated a position of almost $30K of liquidity. What was most surprising about this liquidity generation measure is that it is a completely self-sustaining solution and the liquidity generation capacity of the Tetu protocol is completely linked to the productivity of TVL at work.
The more TVL at work, the greater will be Tetu's liquidity generation.
Low liquidity or limited liquidity was not a problem unique to Tetu. Many protocols face or have already gone through the challenge of generating liquidity, the most used solution is to incentivize the liquidity of native tokens with a high emission. While this solution is very popular and has the potential to attract liquidity to the protocol's native tokens in the short term, in the long term it poses problems as token emissions are reduced and the incentives to provide liquidity become less and less over time. With enough time, users find themselves in a situation where it is no longer attractive to provide liquidity and low liquidity or limited liquidity is again a problem for the protocol.
As Tetu's liquidity generation is associated with TVL at Work's yield farming productivity it is expected that Tetu's liquidity will become even greater as Tetu's TVL increases. A very interesting feature of this liquidity generation system is that if TVL remains at flat levels, liquidity continues to be generated, if a lot of TVL is deposited in the Tetu protocol, even more liquidity is generated, and there are situations where TVL at work fluctuates downwards but the TETU buyback capacity is drastically increased due to the fluctuation of the TETU price, producing a huge liquidity generation even with a lower TVL at work.
Tetu's liquidity generation system creates liquidity in all market environments.
To check the protocol's TETU liquidity funds look for Fund Keeper LP Balance on the Stats page.
All profits from Tetu on Fantom are used to acquire Protocol Owned Liquidity. Profits on Fantom come from the following sources:
10% single asset auto compound fees and Beethoven.
1% auto compound fees from LP assets.
70% of profits from Standard Vaults to Protocol Owned Liquidity.
The effect of 45% of Tetu's profits being converted into protocol owned liquidity creates buying pressure and a growing position of TETU-USDC LP that works as if it were a productive burn as it removes TETU tokens from the market, serves Tetu users through additional liquidity, profit over time through trading fees and represent assets backing the TETU token, increasing its value.
One of Tetu's characteristics is to direct a portion of platform revenue towards Protocol Owned Liquidity. This feature was brought to Tetu by the Tetu process as a way to help bootstrap platform liquidity. The Profit Destination ratio dictates that 45% of the platform revenue is allocated to Protocol Owned Liquidity.
Protocol Owned Liquidity article on .