Rewards Mechanism Explanation

How sUSDca receives rewards

Context

Users are able to receive rewards by staking their USDca and receiving sUSDca atomically in return.

Once users stake their USDca for sUSDca, they begin to accrue rewards without any further action or cost. USDca that is staked is not rehypothecated in any way to generate returns.

Overview

The amount of sUSDca a user receives is determined by how much USDca was transferred as well as when it was transferred. CAMP's sUSDca utilizes a reward-bearing "Token Vault" mechanism, the same as Rocketpool's rETH or Binance's WBETH.

The protocol does not rehypothecate, lend out, or otherwise utilize deposited USDca for any purpose. There is no need for any such action, as the USDca backing mechanic inherently creates value in the system.

This mechanism simply enables CAMP to provide rewards to ecosystem participants without users having to do any action to "earn" it. The USDca value of sUSDca grows on its own. When a user unstakes his or her USDca , the user receives an amount of USDca equal to the initial amount staked plus their share of rewards deposited in the staking contract as rewards while that user's USDca was staked, as reflected in the USDca value increase of sUSDca .

Important Notes

• The amount of sUSDca you receive when you stake USDca is likely to be less in number, but valued at the equivalent amount of USDca. This is a result of the "Token Vault", reward-bearing mechanism and the ratio defined below in the worked example.

• The value of USDca will remain worth the market trading price of USDca while sUSDca will grow in USDca value as the protocol deposits rewards in the staking contract daily.

• If the protocol were to suffer a loss due to funding or another reason, CAMP's reserve fund is intended to bear the cost, rather than the staking contract.

Users can only receive positive or flat rewards while staking USDca; periods of negative protocol revenue are not passed on to sUSDca.

CAMP's reserve fund bears associated costs if funding is so negative that it causes negative protocol revenue.

Calculation & Worked Example

sUSDca :USDca ratio = (total sUSDca supply) / (total USDca staked + total protocol revenue deposited in USDca terms)@c