Equations
Last updated
Last updated
Swaps between Lendr and sLendr during staking and unstaking are always honored 1:1. The amount of Lendr deposited into the staking contract will always result in the same amount of sLendr. And the amount of sLendr withdrawn from the staking contract will always result in the same amount of Lendr.
The treasury deposits Lendr into the distributor. The distributor then deposits Lendr into the staking contract, creating an imbalance between Lendr and sLendr. sLendr is rebased to correct this imbalance between Lendr deposited and sLendr outstanding. The rebase brings sLendr outstanding back up to parity so that 1 sLendr equals 1 staked Lendr.
Lendr has an intrinsic value of 1 DAI, which is roughly equivalent to $1. In order to make a profit from minting, Lendr charges a premium for each mint.
The premium is derived from the debt ratio of the system and a scaling variable called MCV. MCV allows us to control the rate at which mint prices increase.
The premium determines profit due to the protocol and in turn, stakers. This is because new Lendr is minted from the profit and subsequently distributed among all stakers.
The debt ratio is the total of all Lendr promised to minters divided by the total supply of Lendr. This allows us to measure the debt of the system.
Mint payout determines the number of Lendr sold to a minter. For reserve mints, the market value of the assets supplied by the minters is used to determine the mint payout. For example, if a user supplies 1000 DAI and the mint price is 250 DAI, the user will be entitled 4 Lendr.
For liquidity mints, the market value of the LP tokens supplied by the minter is used to determine the mint payout. For example, if a user supplies 0.001 Lendr-DAI LP token which is valued at 1000 DAI at the time of minting, and the mint price is 250 DAI, the user will be entitled 4 Lendr.
Lendr supply does not have a hard cap. Its supply increases when:
Lendr is minted and distributed to the stakers.
Lendr is minted for the minter. This happens whenever someone purchases a mint.
Lendr is minted for the DAO. This happens whenever someone purchases a mint. The DAO gets the same number of Lendr as the minter.
Lendr is minted for the team, investors, advisors, or the DAO. This happens whenever
the aforementioned party exercises their pLendr.
At the end of each epoch, the treasury mints Lendr at a set reward rate. These Lendr will be distributed to all the stakers in the protocol.
Whenever someone purchases a mint, a set number of Lendr is minted. These Lendr will not be released to the minter all at once - they are vested to the minter linearly over time. The mint payout uses a different formula for different types of mints. Check the minting section above to see how it is calculated.
The DAO receives the same amount of Lendr as the minter. This represents the DAO profit.
The individual would supply 1 pLendr along with 1 DAI to mint 1 Lendr. The pLendr is subsequently burned.
Every Lendr in circulation is backed by the Lendr treasury. The assets in the treasury can be divided into two categories: stablecoin and non-stablecoin.
The stablecoin balance in the treasury grows when mints are sold. RFV is calculated differently for different mint types.
For reserve mints such as DAI mint, the RFV simply equals to the amount of the underlying asset supplied by the minter.
For LP mints such as Lendr-DAI mint, the RFV is calculated differently because the protocol needs to mark down its value. Why? The LP token pair consists of Lendr, and each Lendr in circulation will be backed by these LP tokens - there is a cyclical dependency. To safely guarantee all circulating Lendr are backed, the protocol marks down the value of these LP tokens, hence the name risk-free value (RFV).
