Frequently Asked Questions
The reward contracts have been forked from Synthetix. The vault and strategy contracts were adapted from Beefy/early YieldYak and Yearn. Great care has been taken to ensure the safety of the modifications that were made. An audit is planned when the ongoing work on the contracts has been completed.
To incentivize users to reinvest a pools rewards, the amount shown as a kickback will be sent to the user for clicking the reinvest button as WAVAX to cover the transaction cost. It is currently 3% of the value of the reinvest.
Cycle Protocol displays the autocompounding reward based on the last 2 reinvests. This means if TVL in a pool changes significantly, the displayed rewards can be off until 2 more reinvests happen. Additionally, CYCLE rewards are recalculated midnight UTC and the same considerations regarding TVL apply.
Manual compounding is a tedious process, especially when you are staking in multiple pools across many different platforms. The Cycle Protocol does this work for you while saving you gas fees and earning you CYCLE.
On Cycle, compounding is done by the user. A small fraction of the pool rewards are given back to the user for clicking the "Reinvest" Button. This means vaults compound as often as rewards cover the transaction cost to the user for this action, so a larger pool will compound more often than a smaller pool.
Currently 90% of rewards are reinvested back into the vault. The remaining 10% is distributed as follows:
- 3.5% to CYCLE stakers
- 3.5% to the team fund
- 3% to the user that clicked the "Reinvest" button
Many of the operations on Cycle do multiple things under the hood. For example if you zap AVAX into a vault, what actually happens is:
- 1.Half your AVAX is sold for the other pool token
- 2.Liquidity is added to the pool
- 3.Liquidity pool tokens are staked in the vault, minting cyVLT shares
- 4.cyVLT shares are staked for CYCLE rewards
While each of these actions is cheap by itself, you're paying for all of them at once, making the gas price appear comparatively large.
CYCLE rewards are distributed proportionally to vault TVL. The multiplier (0.5x, 1x or 3x) are used to scale that vaults TVL when considering what portion of the reward distribution that vault will receive. For example, if one vault has 1 million TVL and another has 100k, the first one will get 10 times the CYCLE distribution if they're both 1x but if that 2nd vault had a 3x weight, it's TVL would be considered as 300k when determining what portion of the rewards it receives.
When a vault TVL drops below $1,000 it will be marked for decommissioning. From this point on, users can only withdraw their liquidity and claim rewards. The pool will no longer receive rewards and will be removed once all the liquidity has exited.
The airdrop has been for supporters of the dev's previous project. It was completed in May 2021