Revenue Model

Grow Pools

Fees

There is a 0.6% fee on withdrawals, and a 15% platform fee on yield.
For community pools, a 5% share of both of these fees goes to the developer who authored the strategy. This is paid in the pool’s asset.
The fees are then directed to the Vesper Treasury Box.
Say a community pool has $50 million in total withdrawals and $5 million in accumulated yield. This pool would pay a 0.6% withdrawal fee ($300,000), and a 15% platform fee ($750,000), for a total of $1,050,000. Of this $1,050,000, the Developer would get five per cent – $52,500 – and the remaining $997,500 would go to the treasury. That $997,500 is converted to VSP via open market buy-backs (see the algorithm explained below), and 100% of that VSP is distributed to vVSP pool participants.

Incentives

Any user may trigger a Rebalance-Collateral operation, to address pool-wide systemic risk and generate additional stablecoin yield. If collateral price falls below Low Water, this operation will prevent liquidation. If collateral price rises above High Water, this operation will generate additional DAI, which, in turn, generates more yield for the entire pool. Users have the incentive to use this to earn maximum yield and avoid liquidation.
Any user may trigger a Rebalance-Earned operation. This operation swaps earned stablecoin interest for underlying collateral (e.g. DAI to ETH), and adds this collateral to the pool's holdings. Users have the incentive to not call the operation, as the longer the collateral stays in there, the more yield it earns. Balancing that, they have the incentive to call the operation prior to withdrawal, to maximize the amount of collateral in pool, to maximize their share of collateral withdrawn.

Treasury Income

Summary

The Vesper Treasury earns the 0.6% withdrawal fee and 15% platform fee described above. Additional income occurs periodically via partnership incentives such as liquidity mining.
All Vesper pools send pool shares to the vVSP pool. These pool shares are distributed according to an algorithm described below. This algorithm will initially be set by the founders, and later transitioned to community control.

Current Algorithm

Once a day or more, the vVSP rebalance operation liquidates the next-in-line pool shares to VSP tokens. One pool's shares are liquidated at a time in a round-robin fashion. The frequency of conversion is determined by how quickly the treasury grows (more shares = more frequent conversion). Example: 12.5 vETH tokens unwrap to 15.25 ETH, swapped to 18.9 VSP via Uniswap. Keep in mind that the treasury funds represent the 95% remaining after 5% to the pool's Developer.
That 18.9 VSP is deposited into the vVSP pool, increasing the total value of all vVSP tokens by increasing the NAV of the vVSP pool.

Community Growth Engine

The Vesper project and community are tied together by the VSP token.
At launch, 10,000,000 VSP tokens will be minted, and allocated almost entirely to community-focused efforts. In the short term, 3,400,000 of these funds will be allocated to product and liquidity provisioning incentives.
In the long term, the community reserves (3,600,000 tokens) combines with community-defined level of VSP revenue from the VSP vault. These VSP tokens will be held in a community vault, to be used to create a continuous cycle of bootstrapping new products with VSP incentives, which in turn benefits the VSP token, which generates funds to bootstrap yet more products.
Last modified 9mo ago