Yield

This section explains how yield is accrued by earners in Concrete

How is yield accrued for earners?

Yield is obtained from the asset-specific Earn strategies that rely on these sources:

• Money Markets: The protocol deposits funds from the vaults into the money markets that offer the best yield opportunity for the corresponding assets. By constantly monitoring interest and utilization rates and weighing transaction costs, the protocol decides where is the best place to deposit liquidity to earn passive yield.

• Loan protection revenue: The protocol shares revenue derived from the following sources of the loan protection feature:

  • Opening fees: Fee charged when a protection plan is purchased, payable in stablecoin.

  • Claim fees: Fee charged every time a claim is triggered during loan protection.

  • Cancellation fees: Fees charged when borrowers cancel protection before expiry date.

  • Foreclosure fees: Every time a loan is foreclosed, the protocol deducts a foreclosure fee.

  • Value accrual for credit repayments: when borrowers repay credit lines extended in USDC as part of the protection plan, if collateral price is lower at the time of repayment compared to the time of disbursement, the vault will receive a larger amount of the collateral base. This difference is passed as yield to the earners.

  The percentage of revenue shared to the earners is still TBD and it is handled by a system component called the revenue splitter. This percentage can be modified by governance.

• CT token emissions: According to the liquidity capturing strategy of the protocol, CT tokens will be distributed to earners that hold and stake cTokens.

How is yield distributed and calculated?

As explained above, the yield that is accrued by the vault that the cTokens are representing a position at, comes from different sources.

Due to the diversity of the sources, the yield is distributed to the cToken holder in the asset base it was originated.

For example, if Lisa holds 10 cETH tokens and during a specific period that generated:

• 0.01 ETH from the money markets strategy

• 150 USDC from protection fees

• 100 CT tokens

Lisa will be entitled to the earnings in each of those specific assets and amounts.

In order to receive the yields accrued, Lisa needs to claim the rewards.

Claims can be done every 2 week periods. So assuming that during the present 2 week-period Lisa has the rewards listed above available to be claimed, after claiming she will receive in her wallet 0.0 1ETH, 150 USDC and 100 CT tokens.

For displaying purposes, the UI will calculate a notional value of the vault APY by converting the past earnings of a vault and express them as a percentage value in the vault asset.

For example, for an ETH vault, the system will account for the earnings during a specific past time period, convert them all to ETH value, and compared to the amount of ETH deposited during that period, a notional ETH APY will be calculated for that vault and shown in the UI.