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Perpetual Ratio
Unlock perpetual growth and say goodbye to reward front-running!
Introducing the Perpetual Ratio - the not-so-secret ingredient that makes our vaults stand out from the crowd! We know what you're thinking - another fancy-sounding term that's all fluff and no substance. But trust us when we say that the perpetual ratio is a true game-changer.
Not only does it serve as an internal pricing mechanism that gives you an ever-growing stake in our vaults, but it also acts as a powerful safeguard that eliminates reward front-running. This means that you can kick back and relax, knowing that your rewards are always safe and sound.
Here's how it works: each of our vaults has its own unique receipt token, which is minted every time you make a deposit. These receipt tokens have an inherent value that is linked to the perpetual ratio of the vault. As the perpetual ratio of a vault increases, so does the value of your receipt tokens, which means your balance in the vault grows, too!
Think of it like an exchange rate. Just like how 1 pound would be equal to 100 euros at an exchange rate of 100 for the GBP/EUR currency pair, 1 receipt token would be equal to 100 of the underlying vault token at a perpetual ratio of 100.
But the best part? You don't have to do a thing! As the perpetual ratio increases, so does the value of your receipt tokens, and consequently, your stake in the vault. Not only does this provide an excellent opportunity for those who want to see their balance grow exponentially, but it also ensures you earn an increasing amount of rewards as your balance continues to grow. It's like the gift that keeps on giving!
So if you're ready to take your returns to the next level, deposit into our vaults today and experience the power of the perpetual ratio for yourself.
- The perpetual ratio of a vault will never decrease, even if you were to make a withdrawal.
- How does it work, you ask? Simple. The protocol burns receipt tokens every time a withdrawal is made, and the amount burned is equivalent in value to the staked tokens being withdrawn. This ensures the difference in supply between staked and receipt tokens remains in check, which keeps the perpetual ratio constant.
- But wait, there's more! If a withdrawal fee is applicable, the perpetual ratio will actually increase. That's because the fee is deducted from the staked tokens, meaning you'll receive fewer staked tokens but the same value of receipt tokens will be burned. This causes the number of receipt tokens per staked token to decrease, ultimately increasing the perpetual ratio!
- Picture a double-sided scale, with staked tokens on one side and receipt tokens on the other. Now imagine that the supply of staked tokens suddenly increases, while the supply of receipt tokens remains constant. What happens next? You guessed it - the side holding staked tokens becomes heavier, throwing the scale off balance.
- But what does this mean for you? Well, with fewer receipt tokens per vault token, the greater the perpetual ratio, and the more valuable your receipt tokens become.
- Now, let's talk about what causes this imbalance. It happens when the protocol adds tokens to the vault without minting an equal value of receipt tokens. This can occur when the protocol adds tokens from deposit or withdrawal fees. In other words, you can expect the perpetual ratio of a vault to increase every time tokens are deposited or withdrawn from the vault (unless the fee is set to 0%).
- The Perpetual Ratio is a key metric that can impact the value of your staked balance in a vault. But that's not all - this ratio holds the key to unlocking greater rewards and compounded yields that can be withdrawn.
- As the Perpetual Ratio increases, so does the value of your receipt tokens, resulting in an increased balance in the vault. And what does that mean for you? More staked tokens, more rewards, and a bigger smile on your face!
- So, how can you make sure you're taking full advantage of the Perpetual Ratio? It's simple: aim for a low perpetual ratio by entering the vault early and staying staked as long as possible. But don't worry if you miss the early bird window - the Perpetual Ratio is guaranteed to increase as the TVL of the vault grows!
- Regardless of your strategy, it is important to be aware of how the Perpetual Ratio works and how it can impact your position in the vault. Although a withdrawal might seem like a good idea, just keep in mind that if you were to redeposit the withdrawn tokens, the receipt tokens you receive won't be of the same value. Why? Because the Perpetual Ratio would have increased in the meantime.
- So, there you have it - the Perpetual Ratio demystified. Don't be left in the dark about this game-changing metric. Get in on the action, stay staked, and watch your balance and rewards soar!
Last modified 2mo ago