rDPX v2: Where does the yield come from?
The $rDPX v2 system generates yield to be distributed to its participants.
The question on everyone’s mind is likely “Where does this yield come from?”
To understand this, allow CEO to walk you through how bonded tokens are deployed to generate yield.
Let us take a gander.
We will use the example of 0.75 $ETH and 0.25 $ETH of $rDPX bonded for 1 $rtETH.
The Bonded Tokens
Upon bonding, the rDPX v2 system receives:
- 0.75 $ETH
- 0.25 $ETH of $rDPX
And mints 1 $rtETH to the bonder.
The bonded tokens become Dopex PoL and can then be redeployed to earn yield.
Deployment of Bonded Tokens
The bonded tokens are deployed to three different reserves that serve different functions:
- $dpxETH Reserve (receives 0.25 $ETH)
- $ETH Backing Reserve (receives 0.5 $ETH)
- $rDPX Backing Reserve (receives 0.25 $ETH of $rDPX)
$dpxETH Reserve
0.25 $ETH is allocated to the $dpxETH reserve where 0.25 $dpxETH is minted and paired for dpxETH/ETH Curve LP Tokens.
This is staked on Convex to earn yield in the form of $CRV, $CVX, and trading fees.
$ETH Backing Reserves
0.5 $ETH is allocated to the $ETH Backing Reserve before being redeployed.
AMO
The AMO is a contract that allows $ETH to be paired with $rDPX from the $rDPX Backing Reserves for defined functions, including:
- rDPX/ETH LP
- rDPX/ETH CLAMM
$rDPX has a transfer tax (variable, initially 10%) which is earned by the treasury.
PSM
The peg stability module is a contract that allows the swapping of tokens against the $dpxETH/ETH liquidity to maintain peg.
PSM
The staking module is a contract that allows unutilized $ETH to be staked on an LSD service such as FraxFerry or Lido Finance.
This generates yield in the form of staking rewards.
$rDPX Backing Reserves
0.25 $ETH worth of $rDPX is allocated to the $rDPX Backing Reserve where it may then be deployed to the AMO.
Refer to the $ETH Backing Reserves; AMO section above for more details.
Yield Sources
To summarize the deployments and yield sources, please refer to this so-called “table”.
Allocation | Deployment | Yield Source |
$dpxETH Reserve | dpxETH/ETH Liquidity | $CRV, $CVX, trading fees |
$ETH Backing Reserve | AMO | Trading fees |
PSM | Arbitrage fees | |
Staking | Staking yield | |
$rDPX Backing Reserve | AMO | Trading fees |
Truly incredible.
Closing Comments
By deploying bonded tokens across DeFi, the $rDPX system can generate yield to sustain continued growth of $rtETH supply.
More $rtETH supply? More integrations we can seek with other protocols.
Until next time, my beloved readers.
Warm regards,
CEO
About Dopex
Dopex is a decentralized options protocol that aims to maximize liquidity, minimize losses for option writers and maximize gains for option buyers — all in a passive manner. Dopex uses option pools to allow anyone to earn a yield passively. Offering value to both option sellers and buyers by ensuring fair and optimized option prices across all strike prices and expiries. This is thanks to our own innovative and state-of-the-art option pricing model that replicates volatility smiles.
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