Pools are categorized into Dynamic Liquidity Tiers based on real-world metrics like:
Yield-to-Liquidity Ratio (real-world yield generated relative to TVL).
Collateral Quality (asset stability, valuation transparency).
Utilization Rate (how actively liquidity is used for borrowing or trades).
Higher-tier pools receive amplified rewards or additional real-world yield distributions, creating a natural incentive for liquidity to flow toward productive and stable assets.
Real Yield-Backed Rewards:
Instead of relying solely on token emissions, liquidity providers (LPs) earn rewards tied to real-world cash flows generated by RWAs in their respective pools.
Example:
A real estate-backed liquidity pool distributes rental income or property yields directly to LPs, creating sustainable and non-inflationary rewards.
This shifts the focus from speculative rewards to tangible, real-world yield that grows alongside the actual asset performance.
Unlike traditional ve(3,3), where users vote to direct emissions, we automate yield distribution based on the above real-world performance metrics.
LPs no longer need to vote actively to align incentives. Instead, onchain metrics dictate which pools earn real yield, ensuring transparency and efficiency without governance overhead.
Use Case 1: Real Estate Liquidity Pool
A real estate-backed pool generates 10% annual rental yield on its tokenized assets.
Liquidity providers earn:
Their proportional share of the 10% real yield.
Trading fees from asset swaps.
Users who lock liquidity for 6 months earn an amplified share of the yield, increasing their effective returns to 12%.
Use Case 2: Tokenized Fund Pool
A pool holding tokenized equity or bond funds distributes dividends to liquidity providers based on fund performance.
High-performing pools attract more liquidity due to their yield-to-liquidity ratio, creating a self-sustaining feedback loop.
Liquidity pools are prioritized for incentives based on the performance of the underlying RWAs. Metrics such as rental yield, fund dividends, and liquidity utilization determine which pools receive additional rewards.
This approach encourages capital to flow into high-performing, yield-generating pools while maintaining economic efficiency.
Users can amplify their real-world rewards by locking their liquidity for a predefined period, similar to a time-based escrow system.
How would this work?
Flexible Liquidity:
Immediate access to their capital with standard real-world yields.
Locked Liquidity:
Committing to a 3-12 month lockup period to earn amplified yields from both trading fees and underlying real-world cash flows (e.g., rental income or dividends).