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Reward Split Model (Deprecated)

The Reward Split lending pools will function as distinct lending vaults tailored to each specific strategic vault. This segregation of lending pools aims to isolate and manage the risk associated with each individual vault effectively. Vaultka’s unique reward split model collects a ratio of of reward split from profit of leveraged users, such that both borrowers and lenders can benefitted with:
  • Zero borrowing interest: Borrowers enjoy the advantage of a zero borrowing interest rate, and the reward split is only triggered when their closed positions result in positive earnings.
  • Capitalization on LP upside: Participants can capitalize on the positive performance of the underlying assets, rather than a fixed lending rate.
  • Win-win for borrowers and lenders: Both leveraged investors and lenders can earn more than before with the unique Reward Split Model
  • Protected Lending: Lenders’ positions are protected with no down-side threat, as all the potential losses will be borne by leveraged users

Detailed Breakdown

Zero borrowing interest:

  • Borrowers pay zero borrowing interest rate for their positions. Reward will only be shared when their closed positions result in positive earnings
  • This protects borrowers from incurring losses when they are not making positive earnings in their position
Capitalization on LP upside:
  • Unlike traditional systems with fixed borrowing costs that overlook variable asset performance, Vaultka lenders benefit from higher rewards when linked vault performs well
  • This ensures that lenders are appropriately rewarded in alignment with the performance of the associated vault.
Win-win for both borrowers and lenders:
  • Both borrowers and lenders can maximize their earnings compared to direct deposits in the underlying protocol or other traditional lending platforms
  • Borrowers can leverage their capital to amplify their yields, even with smaller initial investments. Meanwhile, lenders can benefit from a split of the leveraged earnings
Protected Lending
  • Lenders’ positions are safeguarded without any downside risk
  • All potential losses are borne by the leveraged users, providing added protection to the lenders' investments
  • The debt-to-value ratio is closely monitored. Liquidation will be triggered once the threshold is exceeded

Reward Split Ratio

The Reward Split Ratio will be based on the utilization ratio of the lending vault:
  • From 0-90%: The split ratio will be 30%
  • From 90-95%: The split ratio will increase linearly from 30% to 70%