Yield for Voting (UPR)
Cadabra offers both passive and active yield opportunities
Last updated
Cadabra offers both passive and active yield opportunities
Last updated
We have modified and expanded the popular ve(3,3) approach. Just like in the classic version, the Cadabra platform distributes in a strategy based on voting results.
Additionally, we introduced extra yield opportunities—our strategies interact with external reward sources, collect and distribute their rewards based on voting results. The share of collected rewards for each user is proportional to the share of his votes, the shares are calculated for each source of income separately. Underlying Protocol Rewards (UPR) are distributed to voters in the tokens of the underlying protocols.
Voting is possible both for an entire strategy and for specific yield sources:
Voting for a strategy allows you to earn a share of UPR from all underlying sources integrated into the strategy
Voting for a specific yield source lets you earn a share of UPR directly from that source
Voting for yield sources can potentially be more rewarding than voting for a strategy, especially if you accurately predict changes in the yield of the underlying source
We have added the opportunity to receive an Airdrop for almost all ways of earning on the Cadabra platform.
Vote for strategies and yield sources to receive rewards from underlying protocols. Vote and earn airdrop points.
The reward amounts and rules can be found in the
Let's consider the Stablecoin strategy. Suppose it has $100,000 in liquidity. Further assume that each vote costs $1 (buying the ABRA for locking and then for getting veABRA), and a total of 20,000 votes were cast for the strategy. The average yield from underlying protocols in the epoch following the voting is 10%. Then the yield from voting will be 5 times greater, equal to 50%, because Cadabra will collect external rewards based on $100,000 in liquidity but distribute them based on votes equivalent to $20,000. This means the yield per vote will be distributed from an amount that is 5 times greater.
Let's extend the previous example. Again, take the Stablecoin strategy, which has $100,000 in liquidity. The strategy operates on two underlying protocols: Thena and Pendle. To cast one vote, you need to spend $1. A total of 20,000 votes were cast for the strategy (10,000 for Thena and 10,000 for Pendle). Accordingly, the liquidity was rebalanced as follows: $50,000 in Thena and $50,000 in Pendle.
The yield from the underlying protocols in the epoch following the voting is 6% for Thena and an estimated 14% for Pendle. The average yield, as in the previous example, is 10%.
As in the previous example, if you vote for the strategy, you can get an APR of 50%. However, if you vote for specific yield sources and correctly predict that Pendle will have a higher APR, then voting for Pendle can yield an APR of 70%, as the source will yield 14% on $50,000, which will be distributed across 10,000 votes (or $10,000).
If you vote only for Thena, the yield will be 30%, which is lower than voting for the entire strategy but higher than in the original protocol.
In the USD Strategy, there are two yield sources: AAVE and Thena AAVE holds 30% of the strategy's total liquidity, while Thena holds the remaining 70%.
Voting for the Strategy The user votes with 200 veABRA for the strategy. The user's vote distribution will be as follows:
200 veABRA will be counted in the voting for ABRA allocation to the strategy
60 veABRA will be counted in the AAVE yield sources
140 veABRA will be counted in the Thena yield sources
Voting for Yield Sources The user votes with 100 veABRA for AAVE and 100 veABRA for Thena. Then the user's votes will be summarized at the strategy level:
200 veABRA will be counted in the voting for ABRA allocation to the strategy
100 veABRA will be counted in the AAVE yield sources
100 veABRA will be counted in the Thena yield sources
Voting results determine the rebalancing parameters. Allocation of liquidity among yield sources influences the Underlying Protocol Rewards (UPR) collected in the next epoch. The more votes a yield source receives, the more liquidity is allocated to it at the start of the next epoch, resulting in increased UPR collection by it.
If a user votes for a strategy, their votes are distributed among the yield sources according to their liquidity shares within the strategy. Votes cast for specific yield sources are counted as a sum at the strategy level.
Votes counted at the strategy level influence the share of ABRA from weekly emissions that goes to the strategy. The more votes a strategy receives, the more ABRA is allocated to it, potentially increasing its APR. Therefore, it may be beneficial to vote for a strategy or its integrated underlying protocols where you have a personal deposit to boost the emission share for that strategy.
Most importantly, a voting user receives a share of the UPR collected in the next epoch, proportional to their voting power.
