VESTING PROGRAM
This presentation outlines the details of the new features being introduced by the LODE protocol on June 21st. One key feature is the LTC Vesting Contract, which aims to reward LODE users who actively participate in the protocol operations and vote on improvement proposals.
OBJECTIVE
The LTC Vesting Program operates through a smart contract with its own internal logic. The primary goal of the LTC Vesting Contract is to allow users to deposit their LTC and eventually receive LODE tokens on Avalanche. Additionally, it provides incentives to encourage users to keep their LODE balances within the contract.
STAKE AND CLAIM
Alice, who holds LTC, decides to join the Vesting program. By depositing her LTC balance, she will receive 4% of that amount in LODE tokens on Avalanche every 30 days for a duration of 25 months.
At each milestone, Alice can either claim her LODE tokens on Avalanche, which will be transferred to her wallet, or she can choose to stake them within the Vesting Contract.
If she opts to stake, she will be rewarded with a fee in LODE tokens on Avalanche every 15 days.
● Alice is holding a positive LTC balance, which she intends to exchange for LODE tokens on Avalanche over the course of 25 months.
● Once Alice deposits her LTC balance, those LTC are burnt by the Vesting contract and the vesting process kickstarts.
● The deposit is non-reversible, due to those LTC being burnt, and each wallet address can execute a single deposit.
Note: very important, the correct terminology is that the user deposits the LTC, we don’t say she stakes it because once deposited she does not get it back in the form of LTC, those LTCs are burnt.
● Every 30 days, Alice will be able to claim (or stake within the Vesting contract) 4% of her initial deposited balance, which naturally will be paid in LODE tokens on Avalanche.
● In the following example, after the first 90 days Alice reaches three milestones, on each one of them she has 68 LODE tokens at her disposal. So, in total and after these 90 days, she could either claim or stake 204 LODE tokens.
● Let’s assume that Alice claims those 204 LODE tokens on Avalanche. In that scenario, the tokens are transferred to her wallet.
● This action is also non-reversible, provided that only LTC can be deposited on the Vesting contract.
● But if Alice decides to Stake her LODE Tokens on Avalanche, that means that the balance is kept within the Vesting contract. The main benefit of this decision is that she receives a reward fee every 15 days, paid up in LODE tokens.
● If she stakes the LODE tokens in the Vesting contract, she’ll receive VOT3 tokens and she’ll be able to vote as long as she keeps her staked position.
Note: in order to guarantee a fee reward equivalent to 7% APY over the course of two years, the 15-day fee per LODE token should account to 0.00278 LODE. The fee is a reward for providing a service to the Lode protocol and ensuring the continuity of operations).
● Assuming that she has staked, over every 15 days a reward fee is assigned to her. She will be able to get that balance once she unstakes her position
(Note: have a look at what happens at day 120, not only she receives the reward fee but she can also claim another 68 LODE).
● If Alice decides to unstake her staked position, she will receive the staked capital plus the reward fees she has collected over time. In exchange for that, she will be sending the 204 VOT3 tokens that she received when staking that LODE balance -she can no longer cast her vote on any proposal, provided that her LODE balance is not staked.
● Assuming that she unstakes at day 135, then she receives a total amount of 210 LODE tokens in her wallet.
● Recall that once she gets that balance in her wallet, she is no longer able to stake it back into the vesting contract.
THE MOTHERLODE JACKPOT
From the moment the Vesting contract is launched and up to 25 months onwards, users can stake their claimable LODE balance in exchange for a reward fee every 15 days.
Once that period is over, users who have kept their LODE balance staked will be able to claim a Jackpot, which is composed of AUX/AGX/USDC/AVAX rewards that have been collected over time as a share of what has been deposited into the Reward Generator (to be explained later on).
Only stakers who stake until the staking period is over can then claim their share of the Jackpot.
● Assuming that Alice has staked her full LODE balance prior to the staking deadline, a possible scenario could be the following:
● As you can see, when Alice claims her Jackpot she receives the total Jackpot balance accrued to her plus her staked position. She can no longer stake any LODE balance after the staking period within the Vesting program is over.
● What can she do with her LODE balance? She can stake it into the Reward Generator, which we’ll analyze in the next session.
