# Yield for Voting (UPR)

### **ATTENTION! The project has been shut down! Details can be found at:**

<https://cadabra.gitbook.io/v2/articles/announcement-of-cadabra-finance-stopping>

### **Everything written below on this and all other pages is no longer relevant and is provided for historical information only. If you continue to use the project website or its smart contracts, you do so at your own risk.**

## Voting

We have modified and expanded the popular ve(3,3) approach. Just like in the classic version, the Cadabra platform distributes [ABRA emissions to liquidity providers](https://cadabra.gitbook.io/v2/earn-with-cadabra/yield-from-strategies-abra) in a strategy based on voting results.&#x20;

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

{% hint style="success" %}
Voting for yield sources can potentially be <mark style="color:green;">**more rewarding**</mark> than voting for a strategy, especially if you accurately predict changes in the yield of the underlying source
{% endhint %}

{% hint style="success" %}
We have added the opportunity to <mark style="color:green;">**receive an Airdrop**</mark> for almost all ways of earning on the Cadabra platform.&#x20;

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 [Airdrop section.](https://cadabra.gitbook.io/v2/airdrop/airdrop-season-3#id-3-voting)
{% endhint %}

### Voting for a Strategy

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 <mark style="color:green;">**5 times greater, equal to 50%**</mark>, 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**.

### Voting for a Specific Yield Source

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 <mark style="color:green;">**APR of 70%**</mark>, 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.

{% hint style="info" %}
This is called Voting APR, which is calculated as the external return (UPR) received by a strategy per dollar equivalent of votes cast for it
{% endhint %}

***

## Voting Results

<img src="https://content.gitbook.com/content/Lxlj44yzs1GJR6VKsChZ/blobs/NWABMH91EqPnggAOQ2A4/image.png" alt="" data-size="line"> 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.

<img src="https://content.gitbook.com/content/Lxlj44yzs1GJR6VKsChZ/blobs/b2zopdy6TJ61lENPuo9i/image.png" alt="" data-size="line"> 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.

> 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

<img src="https://content.gitbook.com/content/Lxlj44yzs1GJR6VKsChZ/blobs/4CDjDacP1zpjRjwrPQ5Z/image.png" alt="" data-size="line"> 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.

<img src="https://content.gitbook.com/content/Lxlj44yzs1GJR6VKsChZ/blobs/Whuz3FgMo0Vj7Q4soSkc/image.png" alt="" data-size="line"> **Most importantly, a voting user receives a share of the UPR collected in the next epoch, proportional to their voting power.**

***

## Step by step

```
1. Obtain ABRA:
       - Buy it on the market
       - Earn it as a reward for depositing in a strategy
2. Get veABRA by locking ABRA
3. Vote for rewards in the next epoch
       - Vote for a strategy to receive a share of all UPR collected by that strategy
       - Vote for a wrapper to receive a share of the UPR collected by a specific underlying yield source

-> Start receiving UPR each epoch
```