One of the main incentives for staking $CRUIZE for $esCRUIZE is the ability to boost your rewards on the provided liquidity. $esCRUIZE tokens allow you to earn a boost of up to 25x on the yield generated on your provided liquidity.
A total of 10,000,000 $CRUIZE tokens will be reserved each year for these boosted rewards. The protocol will group users into 4 tiers depending on the below ratio,
r=liquidity_providedesCRUIZE_held where the multiplier associated with each tier is as follows:
r < 5% will receive a 1x multiplier
5% < r < 15% will receive a 4x multiplier
15% < r < 25% will receive 10x multiplier
25% < r will receive a 25x multiplier
In order to avoid exceeding the 10,000,000 yearly rewards limit, the following constrain must be achieved:
(users_tier_1∗1∗x)+ (users_tier_2∗4∗x) + (users_tier_3∗10∗x)+ (users_tier_4∗25∗x) = 10,000,000 where x constitutes the base reward rate. Therefore, the amount of returns to be augmented by each tier’s multiplier has to be:
x=∑i=14(users_tier_i * multiplier_i)10,000,000 for multiplier_i = 1, 4, 10, 25 for i = 1, 2, 3, 4 respectively.
Example
Let’s see this with an example. Let’s suppose the protocol configuration is as follows,
APY_after_protocol_fees = $830,000
CRUIZE_price = $0.3
Let's suppose that we have 4 users with the following percentages of LP provision and staked assets
user 1: 10% liquidity_provided ; 1% esCRUIZE_held ⇒ r = 0.1 ⇒ tier 2
user 2: 10% liquidity_provided ; 1% esCRUIZE_held ⇒ r = 0.1 ⇒ tier 2
user 3: 10% liquidity_provided ; 1% esCRUIZE_held ⇒ r = 0.1 ⇒ tier 2
user 4: 70% liquidity_provided ; 97% esCRUIZE_held ⇒ r = 1.38 ⇒ tier 4
Then the base APY generated on the total value staked by all users is 8.30% and the base reward rate of the APY is given by
x = (3∗4) + (1∗25)10,000,000 = 270,270 which gives a final total APY of
user 1: 8.30% + 10%∗10,000,0004∗x = 44.3%
user 2: 8.30% + 10%∗10,000,0004∗x = 44.3%
user 3: 8.30% + 10%∗10,000,0004∗x = 44.3%
user 4: 8.30% + 70%∗10,000,00025∗x = 104.83%