NEU & esNEU
Neutra Finance's tokenomics is largely composed of NEU and esNEU (escrowed NEU).
NEU is the utility and governance token of Neutra Finance.
By staking NEU, you will earn
- Protocol fees in stablecoins (currently DAI)
- Escrowed NEU (esNEU)
- Fee Boosters
Protocol fees are collected from our strategy vaults, consisting of Management Fee (2% of TVL yearly) and Performance Fee (20% of APR). 50% of the fees is allocated to cover operational expenses and 50% is distributed as fee rewards to token stakers.
Keep reading for more details on esNEU and Fee Boosters!
esNEU is distributed to NEU token stakers and strategy vault participants.
esNEU is non-liquid, non-transferrable NEU that can be used in two ways:
- 1.Staked to receive the same rewards as a regular NEU token (fees, esNEU, Fee Boosters)
- 2.Vested for 12 months to become actual NEU tokens
esNEU has the effect of giving higher returns to long-term stakers, who can be seen as Neutra's committed users qualified to make major decisions regarding the protocol's future. The longer and the more you stake, the larger share of governance power and fees you take. The value of esNEU comes from these accumulating rewards over time. This aligns the interests of Neutra Finance and our token holders for long-term growth.
esNEU that have not been staked can be vested to be redeemed as NEU. When you initiate vesting, your esNEU will be linearly converted into NEU every second and will fully vest at the end of 12 months.
Vesting requires "reserving", or locking, into the vesting vault the staked NEU, the average amount of NEU or vault tokens with which you acquired the esNEU. NEU, esNEU and Fee Boosters can be used interchangeably for the required amount.
For example, if you staked 1000 NEU and earned 100 esNEU tokens, then to vest 100 esNEU tokens, 1000 NEU tokens will be reserved. To vest 50 esNEU, 500 NEU tokens will be reserved. Note that this is an example and the actual ratio depends on the average staked amount and rewards earned for your account.
Staked tokens that are reserved in the vesting vault will continue to earn rewards. Note that you will not be able to unstake the tokens while they are reserved. Using the "Withdraw" button will unreserve tokens and pause vesting.
Note that partial withdrawals of vesting esNEU are not supported. Upon withdrawal, all tokens will be unreserved and vesting will be paused.
Fee Boosters give an extra boost to your stablecoin fee earnings. By staking NEU or esNEU, you will earn Fee Boosters every second at 100% APR. So, by the end of 1 year, you will have Fee Boosters at an equal amount as your staked tokens.
Each Fee Booster will earn stablecoin rewards at the same APR as a regular NEU token, with total boost being determined by the ratio of Fee Boosters to your total amount of staked NEU. Hence, your rewards from Fee Boosters can be calculated as (Staked Fee Boosters) / (Staked NEU + Staked esNEU) * DAI APR.
When you unstake your NEU or esNEU, generated Fee Boosters will be burned proportional to the share of tokens you unstake. In other words, (Unstaked NEU + Unstaked esNEU) / (Staked NEU + Staked esNEU) * Generated Fee Boosters will be burnt.
Below is a summary of each feature:
Can be staked for governance power and share of revenue
Can be staked for more rewards or vested for 1 year
Can be staked to boost fee rewards
Automatically staked on mint
*Unstaking NEU/esNEU/Vault Token will pause esNEU vesting and burn a proportional amount of Fee Boosters.
esNEU emissions will have an annual maximum cap of 2% of total $NEU supply. Emissions will be constantly monitored and may be subject to change.