ZeroLend Emission Strategy

This page documents how the ZERO emissions will be distributed over time

ZeroLend plan implement a hardcoded 4:1 emissions ratio for borrowing and lending, respectively. This incentive structure is predicated on the principle that borrowing necessitates collateralized lending; thus, by encouraging borrowing, the platform inherently promotes more lending.

This strategy is expected to elevate APYs in borrowing and lending pools, augmenting revenue for the company and potentially leading to increased buybacks and emissions.

Types of Emissions

ZeroLend features two types of emissions as part of its incentive structure:

  1. Primary Emissions: Rewards specific to assets.

  2. Secondary Emissions: Rewards distributed in $ZERO tokens.

Our focus here is on Secondary Emissions as they are the only emissions affected by $veZERO.

Example of Secondary Emissions Distribution

Let's assume ZeroLend plans to distribute 1 million $ZERO tokens as ecosystem incentives. The allocation of these tokens is determined by the $veZERO delegated to each asset. Here's a simplified breakdown:

Asset$veZERO DelegatedPercentage of Total $veZERO$ZERO Rewards

$USDC

30M

30%

300K

$ETH

20M

20%

200K

$MANTA

50M

50%

500K

In this scenario:

  • $USDC receives 300,000 $ZERO, as it holds 30% of the total $veZERO delegated.

  • $ETH is allocated 200,000 $ZERO, corresponding to its 20% share.

  • $MANTA gets 500,000 $ZERO, being the largest beneficiary with 50% of $veZERO delegation.

This table illustrates how the delegation of $veZERO tokens directly impacts the distribution of secondary emissions, incentivizing stakeholders to strategically delegate their tokens to favor certain assets within the ZeroLend ecosystem.

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