ICX Reflection Yield
ICX Reflection Yield
The ICX Reflection Yield is one of the two primary yield streams in the ICX Protocol. It rewards participants who stake their ultraLP tokens (ICX Miners) in the ICX Ultra Vault. Reflection Yields are designed to provide consistent returns, incentivizing long-term staking and engagement with the protocol.
Purpose of Reflection Yield
Encouraging Participation:
Reflection Yields serve as a reward mechanism for participants who actively stake ultraLP tokens.
By tying yields to Base Reflection Power, the protocol ensures that participants are rewarded relative to their contribution.
Promoting Long-Term Staking:
The vesting schedule for Reflection Yields incentivizes users to remain engaged over an extended period.
The deflationary mechanics of the protocol ensure that as more participants exit early, the remaining stakers benefit disproportionately.
Sustaining Tokenomics:
Reflection Yields are integral to maintaining a healthy distribution of ICX tokens while reinforcing the deflationary design.
Mechanics of Reflection Yield Distribution
Daily Reflection Yield Pool:
A fixed portion of ICX is allocated daily to the Reflection Yield pool.
The size of the pool decreases annually in accordance with the disinflation schedule, ensuring long-term sustainability.
Reflection Power:
Reflection Power determines a participant’s share of the daily Reflection Yield pool.
Base Reflection Power is activated by staking ultraLP tokens in the Ultra Vault.
ICX Multipliers further amplify Reflection Power, enabling users to earn a larger share of the pool.
Yield Distribution Formula: The daily Reflection Yield is distributed based on the following formula:
Vesting Schedule:
5% Liquid: Available immediately upon claiming.
95% Vested: Unlocks linearly over 45 days, ensuring gradual release and mitigating sell pressure.
Impact of Multipliers on Reflection Yields
ICX Multipliers:
Amplify Reflection Power, increasing the user’s share of the Reflection Yield pool.
Require staking additional ICX, with 50% of the deposit burned.
Weekly maintenance is needed to sustain the multiplier.
Synergy with Auction Yields:
Reflection Yields can be used as liquid ICX to participate in daily auctions, enhancing Auction Power.
Participants who reinvest Reflection Yields gain a strategic advantage in both yield streams.
Reflection Yield Dynamics
Compounding Benefits:
Users can reinvest Reflection Yields to increase Base Reflection Power, creating a compounding effect over time.
Deflationary Effects:
Early exits by participants redistribute unvested Reflection Yields, burning 55% and allocating the remaining 45% back to the ecosystem.
This deflationary mechanism enhances token scarcity and rewards committed participants.
Sustainability:
The vesting mechanism ensures a steady supply of ICX tokens while discouraging short-term speculation.
Example: Daily Reflection Yield Distribution
Participant
Base Reflection Power
ICX Multiplier
Reflection Power
Daily Yield (%)
Reflection Yield (ICX)
Participant 1
10,000
2x
20,000
2%
200,000
Participant 2
20,000
4x
80,000
8%
800,000
Participant 3
50,000
6x
300,000
30%
3,000,000
Participant 4
100,000
10x
1,000,000
60%
6,000,000
Total
180,000
1,400,000
100%
10,000,000
Benefits of Reflection Yield
Rewarding Long-Term Engagement:
Participants benefit from sustained staking and compounding.
Aligning Incentives:
The protocol’s deflationary mechanics ensure that committed users are rewarded while discouraging speculative behavior.
Creating Synergy:
Reflection Yields provide the liquidity needed for Auction Yields, creating a mutually reinforcing reward system.
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