Yield Distribution
1. Protocol Revenue Streams
The Creek Protocol generates revenue through multiple monetization channels:
Liquidation Fee Revenue:
7% standard liquidation penalties from under-collateralized positions
Additional urgency premiums during high volatility periods
Protocol-executed liquidation revenues
Auxiliary Service Revenue:
Integration partnership fees
Cross-chain bridge fees
Analytics and API access fees
2. Revenue Aggregation System
The Revenue Aggregation System centralizes all protocol income streams through an efficient collection architecture:
Consolidation Mechanism:
Automated daily aggregation of all revenue streams
Conversion of non-GUSD revenues to treasury-designated assets
Direct routing to treasury smart contract
Collection Cadence:
Fixed 24-hour collection cycle (00:00 UTC)
Emergency collection capability during extreme volume events
Minimum threshold triggers for gas optimization
Revenue Normalization:
Standardization of multi-currency revenues to equivalent value units
Oracle-based conversion rates for non-stablecoin fees
Time-weighted average pricing for conversion calculations
Treasury Management:
Consolidated revenue held in multi-signature treasury contract
Automated distribution trigger following successful aggregation
Transparent on-chain accounting of all revenue flows
3. Distribution Algorithm
The Distribution Algorithm implements precise allocation of aggregated revenue according to ecosystem priorities:
Core Distribution Ratio:
35% allocated to GY token holders (yield enhancement)
35% allocated to GUSD LPs (stablecoin incentivization)
15% directed to Insurance Fund (protocol security)
15% allocated to team multi-signature address (immutable)
Implementation Mechanism:
Smart contract-enforced distribution following daily aggregation
Ratio-based mathematical distribution to respective contracts
Time-locked execution to ensure predictable distribution timing
Governance Flexibility:
Fixed 15% team allocation (immutable)
Other allocation ratios adjustable through governance proposals
Minimum 7-day timelock for ratio modification implementation
Maximum 5% adjustment per governance cycle
4. Reward Claiming
The Reward Claiming System enables stakeholders to access their allocated protocol revenues:
GR Holder Rewards:
Proportional distribution based on GR holdings
Claimable via dedicated rewards contract
Auto-compound option for optimized returns
GUSD Holder Rewards:
Participation through dedicated GUSD LP holdings
APY visibility in real-time based on protocol performance
Claim Optimization:
Gas-efficient batched claiming
Automatic compounding options
Cross-asset reward options (GUSD, GY, or original assets)
5. Insurance Fund
The Insurance Fund functions as the protocol's financial backstop against extreme market events:
Capitalization Sources:
15% of daily protocol revenue
100% of protocol-executed liquidation rewards
Dedicated allocation from protocol token supply
External deposits from ecosystem participants
Fund Utilization Parameters:
Primary capital source for protocol-executed liquidations
Automated deployment during oracle failure events
Backstop for extreme volatility scenarios
Smart contract vulnerability mitigation
Deposit Mechanism:
User deposits of SUI and USDC accepted
Dynamic interest model ranging from 10-25% APY
Interest derived from insurance fund reserve utilization
Maximum loss exposure of 20% principal during extreme events
Growth Management:
Target reserve size scaling with total value locked
Maximum fund cap of 20% of protocol TVL
Excess above cap redirected to GUSD rewards pool
Minimum threshold maintained through priority revenue allocation
6. Black Swan Response Integration
The Insurance Fund incorporates sophisticated protocols for extreme market events:
Activation Thresholds:
Gold price volatility exceeding 15% in 24 hours
System-wide Health Factor below 110%
Multiple oracle failure detection
Governance-initiated emergency response
Deployment Hierarchy:
Tiered response based on severity assessment
Proportional capital deployment relative to systemic risk
Maximum single-event exposure capped at 40% of fund reserves
Recovery mechanism for fund replenishment following utilization
User Protection Mechanism:
Principal protection prioritization for depositors
Maximum 20% impairment under most extreme scenarios
Pro-rata loss distribution when necessary
Recovery rights for potential future system surplus
7. Governance-Directed Fund Utilization
The Treasury and Insurance Fund utilize a flexible governance framework enabling adaptive resource allocation:
Alternative Utilization Pathways:
Protocol-owned token buybacks and token burns
Strategic ecosystem investments
Liquidity provision to critical trading pairs
Developer grants and incentive programs
Cross-protocol insurance collaborations
Proposal Framework:
Formalized proposal template specifying:
Requested amount and source (Treasury or Insurance Fund)
Specific utilization purpose and expected outcomes
Risk assessment and contingency planning
Performance metrics for post-implementation analysis
Execution Parameters:
Treasury utilization proposals require standard governance approval
Insurance Fund utilization requires elevated approval threshold (66%)
Emergency utilization subject to expedited voting process
Implementation through time-locked multi-signature execution
Utilization Constraints:
Insurance Fund principal protected during normal operations
Maximum non-emergency deployment capped at 30% of Treasury
Reserve requirements maintained through dynamic thresholds
Quarterly utilization cap to ensure sustainable fund management
Buyback Implementation:
Programmatic execution through predefined parameters
Market impact minimization through TWAP execution
Optional token burning mechanism for supply reduction
Performance metrics visibility for governance evaluation
Accountability Framework:
Quarterly utilization reports for all governance-directed allocations
Performance tracking against proposal projections
Real-time dashboard for current utilization metrics
Historical utilization archive for precedent evaluation
This comprehensive governance framework for Treasury and Insurance Fund utilization enables the protocol to adapt to changing market conditions and ecosystem priorities while maintaining appropriate safeguards. Through structured proposals and transparent execution, stakeholders can direct protocol resources toward value-enhancing initiatives including token buybacks, ecosystem development, and strategic investments while preserving the core security functions of these reserves.
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