Flexible Reserve Stability

Fee Rate Model

Creampan introduces unstake fee rate model to stabilize the flexible reserves in the contract. The unstake fee is smoothly increase when the utilization rate is below a certain threshold.

If the utilization rate is above the threshold, the unstake fee will increase sharply. Once the fee increase, the speed of utilization rate increase will slow down. The unstake monitor in the background will unstake the amount of asset and send the asset to the contract. After the asset is sent to the contract, the fee rate will decrease. Therefore, fee rate model helps to stable the flexible reserves.

In worst case scenario, if the flexible reserves is totally empty, users may still wait several days to allow ustaked fund sent to the contract.

The adjustment of the fee rate slope and threshold can be determined in the governance proposals. The model is explained below:

Figure of fee rate model

Fee = baseRate + Mulitple * Min(Utilization, Kink) + JumpMultiple * Max(0, Utilization-Kink)

baseRate: the basic fee at zero utilization rate

Mulitple: the slope of fee before the utilization rate kink point

JumpMultiple: the slope of fee after the utilization rate kink point

Kint: the critical utilization rate after which fee will increase sharply

TargetRatio: target delegation ratio

DelegationRatio: current delegation ratio of delegated amount to total amount

Utilization: (1 - DelegationRatio) / (1-TargetRatio) = current flexible reserve / target flexible reserve

Those parameters will detemined in the governance proposals.