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Reward Distribution

HedgeCore yield allocation methodology and reward mechanism

Reward Distribution

HedgeCore implements a bifurcated yield allocation system for participant rewards. The protocol generates consistent returns through Venus Protocol integration while preserving governance capacity for supplementary reward initiatives.

Bifurcated Revenue Streams

1. Venus Protocol Returns (Foundation)

Protocol automatically produces yields via USDC deployment into Venus Protocol:

  • Gross Returns: Venus Protocol's prevailing lending APY (variable, ~7-8%)
  • Performance Fee: 7% of generated returns captured as protocol revenue
  • Net Participant Returns: 93% of Venus yields allocated to stakers

Illustration: With Venus yielding 7.23% APY, participants realize 6.72% APY post-fee application.

2. Governance-Authorized Rewards (Enhancement)

Supplementary rewards deployable via rewardMint() function, restricted to protocol owner (multisignature). This facilitates:

  • Incentive campaigns
  • Early participant bonuses
  • Community reward programs
  • Strategic collaboration distributions

Returns Calculation Model

Participant APY = (Venus APY × 0.93) + Governance Enhancement APY

Components:

  • Venus APY fluctuates per Venus Protocol lending dynamics
  • Governance Enhancement APY varies with protocol determinations

Lock State Inheritance

All distributed rewards (Venus-derived and governance-minted) inherit recipient lock status:

  • Locked addresses: rewards subject to identical unlockAt parameters
  • Unlocked/new addresses: 1-second placeholder lock applied, mandating manual release

This preserves sUSD's soul-bound characteristics across all reward distributions.

Verifiable Yield Monitoring

Chain-Level Verification

Participants verify returns through:

  • Venus Protocol's public supplyRatePerBlock() interface
  • Protocol fee percentage (7%) displayed in interface
  • Event emissions for all reward allocations

Interface Presentation

The UI presents:

  • Active Venus APY (gross)
  • Protocol fee percentage
  • Net participant APY (post-fee)
  • Active governance rewards (when applicable)

Push-Based Distribution

No participant-initiated claiming mechanism exists. All rewards deploy directly to participant wallets via:

  • Scheduled yield distributions from Venus earnings
  • Direct governance reward generation

This approach minimizes transaction costs and eliminates claim manipulation vulnerabilities.

Transparency and Observability

All reward deployments generate events:

  • RewardsDistributed(address,uint256) for distribution tracking
  • Chain analytics aggregate cumulative yields
  • Monitoring interfaces display real-time and historical reward data

Fee Structure Disclosure

The 7% protocol fee on Venus returns is:

  • Hardcoded in interface for transparency
  • Allocated to protocol advancement and operations
  • Explicitly communicated to all participants
  • Verifiable via Venus rate comparison with distributed yields

Distribution Summary

HedgeCore's reward architecture synthesizes automated Venus Protocol yields with governance adaptability. The transparent 7% performance fee ensures sustainable advancement while participants capture 93% of generated returns. This combined framework delivers foreseeable baseline yields with enhancement potential, maintaining protocol's soul-bound token framework throughout.

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