Bond & Stake
Users initiate a bond by providing liquidity to the Uniswap position. The bonded tokens can be converted to BLP tokens at any time.
Bonds
The amount of BLP tokens the user gets is determined by an accrual schedule. The longer the bond period, the greater the amount of tokens the user will get. The curve is asymptotic, which means the amount of tokens a user gets never reaches the cap, giving the user diminishing returns while bonded.
Any bonded liquidity that was not converted to BLP during the accrual schedule becomes protocol acquired liquidity.
Example
Alice has $1,000 she would like to bond. She must first provide liquidity to EXIT10's USDC/ETH position. As soon as she provides liquidity, the accrual schedule period starts accumulating BLP tokens—blue line in the above graph.
After one week and a half—green line above—she decides to convert the liquidity to BLP tokens. She receives around $900 worth of BLP, the amount of tokens that have been accumulated* during her waiting period.
Her $1,000 worth of liquidity will be divided as follows:
$900 worth of liquidity are sent to the Reserve Bucket
$100 worth of liquidity are acquired by the protocol and sent to the EXIT bucket, explained in more details below.
*We assume the accrual schedule parameter is set to 24 hours.
Alice can choose to cancel the bond at any time and receive back 100% of her deposited liquidity minus any fees that might have accumulated during the bond period.
BLP tokens can be burned at any time and used to claim back the liquidity they represent.
Buckets
Assets in the protocol exist in 4 conceptual buckets:
Pending Bucket
The Pending Bucket holds the deposited liquidity during the bonding period. Users who cancel their bonds during the bonding process and decide not to mint BLP tokens receive their original liquidity deposit back in full.
Reserve Bucket
Holds all the liquidity that backs the BLP token. When a user mints Base tokens (BLP), the same liquidity amount is transferred from the pending bucket to the reserve bucket. This guarantees a 1:1 redeemability of liquidity by BLP holders.
Exit Bucket
Any liquidity amount that was not accrued to the user during the accrual schedule is transferred to the Exit Bucket and considered protocol acquired liquidity.
Boostrap Bucket
Holds all the liquidity that was deposited during the bootstrap phase. It is returned in full to BOOT holders when ETH reaches $10K.
Fee Distribution
Fees generated by all 4 buckets are distributed according to the schema below
Fees generated go to different participants according to predetermined rules
Exit Holders
80% of the accumulated transaction fees
BLP stakers continuously earn EXIT tokens, which can later be burned in exchange for their share of accumulated transaction fees—in the form of ETH and/or staked ETH—and protocol acquire liquidity. The staked ETH amount will depend on the availability of 3rd party protocols.
Bootstrap Depositors
10% of the transaction fees
Depositors in the bootstrap phase receive 10% of the trading fees generated through the lifetime of the protocol. Since they subsidize part of the yield produced to BLP stakers, they are incentivized to promote awareness of the protocol in order to stimulate bond creation and therefore their fee revenue.
Early Backers
5% of the transaction fees
Early backers who supported the team in the early building stages of the protocol.
Team
5% of the transaction fees
Even though the Smart Contracts are immutable, this serves as an extra incentive for the team to continuously improve the user experience and UI through charts, explainers, articles, dashboards, etc.
Fees for Bootstrap depositors, Early Backers and the Team are distributed in real time.
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