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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