Rewards

The reward model described below is currently under development and may be adjusted based on regulatory requirements prior to final implementation.

The distribution of profits generated by the DSponsor treasury is a key pillar of the protocol. It aims to reward locked token (veDCAST/veDCASTLP) holders and support the growth of the ecosystem.

Monthly distribution of rewards

At the beginning of each month, the profits accumulated during the previous month are distributed as follows:

• 20% to veDCAST token holders: This significant portion is intended to maintain a strong core of DCAST token holders who lock their tokens into the project, creating a stabilizing effect and constant demand for the token. The distribution calculation is based on the number of veDCAST tokens held at the first second of the previous month compared to the total number of veDCAST tokens in circulation.

• 50% to liquidity providers: Liquidity providers play a crucial role in facilitating the exchange of DCAST tokens and are generously rewarded to offset potential losses related to impermanent loss, especially during significant token price fluctuations. The payout calculation is based on the number of veDCASTLP tokens held at the first second of the previous month compared to the total number of veDCASTLP tokens in circulation.

The remaining 30% is retained by the protocol treasury :

• 15% for operating expenses: A portion of the revenue is allocated to the strategic reserve to cover operational costs and other necessary expenses.

• 15% for diversification: These funds are used for diversified investments, such as DeFi placements or investments in other projects, to strengthen the protocol's financial resilience.

Eligible rewardable revenues

Rewards are calculated based solely on the revenue received by the treasury in WETH, WBTC, and USDC. Revenues from other cryptocurrencies are held in the treasury for future use. Therefore, recipients will receive a proportional share of the WETH, WBTC, and USDC tokens accumulated by the treasury during the previous month.

Currently, a buyback mechanism for DCAST is being studied for the portion to be redistributed to veTOKEN holders.

Example of reward calculation

To illustrate how veTOKEN holders could benefit from the revenue generated by the DSponsor treasury, let's examine a scenario based on the following monthly performance:

• Treasury revenues :

  • 1 WBTC

  • 15 WETH

  • 50 000 USDC

  • 100 000 DAI

Let us assume that at the beginning of the month in question, a user held 30,000 veDCAST out of a total of 600,000 veDCAST, which is 5% of the total DCAST staking. This percentage makes him eligible for 5% of the 25% share of the month's revenue dedicated to veDCAST holders, which is 1.25% of the total rewards. As a result, this holder will receive :

• 0.0125 WBTC, equivalent to 1.25% of 1 WBTC

• 0.1875 WETH, equivalent to 1.25% of 15 WETH

• 625 USDC, equivalent to 1.25% of 50,000 USDC

• 0 DAI (as DAI is not eligible for rewards)

Impact on the DCAST token price

The price of the DCAST token is supported by the locking of tokens within the protocol to receive a share of the monthly treasury revenues. The impact on the price will be more significant as the fees collected by the treasury increase, encouraging more locking of DCAST tokens in circulation.