# Hyper $VLP Event

As an extra incentive to provide liquidity to the protocol, there will be a pre-launch hyper VLP reward program. VLP minting will begin prior to launch with no minimum amount for minting. The redeeming of VLP for USDC will be disabled during this time window.

There will be 6 tiers as follows:

Tier | VLP | VELA | VELA / VLP |
---|---|---|---|

1 | 0 - 500,000 | 250,000 | 0.500 |

2 | 500,000 - 1,500,000 | 375,000 | 0.375 |

3 | 1,500,000 - 3,000,000 | 500,000 | 0.333 |

4 | 3,000,000 - 5,000,000 | 500,000 | 0.250 |

5 | 5,000,000 - 7,500,000 | 500,000 | 0.200 |

6 | 7,500,000 - 10,000,000 | 375,000 | 0.150 |

The tiers are to be filled on a first come first serve basis, with a maximum of 2,500,000 VELA in rewards if fully filled. The starting price of VLP will be ~1 USDC.

The total

$T$

VELA given out as rewards over the 1 year vesting period is a function of how many hyper $H$

VLP are minted.VLP Minted [H] | VELA Rewards [T] |
---|---|

H < 500,000 | 0.500 x H |

500,000 < H < 1,500,000 | 0.375 x (H – 500,000) + 250,000 |

1,500,000 < H < 3,000,000 | 0.333 x (H – 1,500,000) + 625,000 |

3,000,000 < H < 5,000,000 | 0.250 x (H – 3,000,000) + 1,125,000 |

5,000,000 < H < 7,500,000 | 0.200 x (H – 5,000,000) + 1,625,000 |

7,500,000 < H < 10,000,000 | 0.150 x (H – 7,500,000) + 2,125,000 |

**T:**The total VELA Hyper VLP rewards over the 1 year vesting period for all wallets

**H:**The total hyper VLP that are minted by all wallets

**minVLP:**The minimum VLP held by each participating wallet each month

**BaseVLP:**Initially equals each wallets hyper VLP minted at launch. It is updated monthly to equal each wallets previous monthly minVLP.

**BaseVELA:**Each wallet’s starting yearly VELA reward allocation.

**BaseRatio:**This is unique for each wallet and is equal to BaseVELA / BaseVLP; it does not change after the snapshot at time of launch.

**F:**Normalization Factor - ensures that

$T$

tokens are distributed over the 12 month hyper VLP period. It increases over time as participating wallets redeem their BaseVLP.A snapshot is taken at launch, at which point the amount of VLP minted for each wallet,

$BaseVLP$

, and the corresponding $BaseVELA$

(which depends on which combination of tiers each user minted their VLP) determines the $BaseRatio$

for that wallet.For example, assume someone mints 5000 VLP in tier 4 (0.25 VELA/VLP) and another 4000 VLP in tier 5 (0.20 VELA/VLP) for a total

$BaseVLP$

of 9000. Their $BaseVELA$

would then be 2050=5000x0.25 + 4000x0.20 and their $BaseRatio$

would be 0.228=2050/9000.A total of

$T/12$

VELA will distributed monthly via airdrop to each participating wallet based on the following equation for wallet $i$

and a total of$N$

participating wallets$Airdrop(i) =\frac{minVLP_i \times BaseRatio_i}{12}\times F$

$F =\frac{T}{\sum_{i=1}^\N (BaseRatio_i \times minVLP_i)}$

Qualified hyper VLP holders can mint/redeem at any time post-Launch. If a wallets VLP holdings drops below

$BaseVLP$

then this new amount,$minVLP$

, will be used to determine their new baseline allocation for both the current as well as all the following months as shown by the arrows in the example below, which for simplicity consists of only 4 wallets with T=2,500,000 VELA.**Month 1: (F: +112%; 1.000 -> 2.119)**Wallet #1 retains 0% of BaseVLP; reward changes by -100% [0.00 x 1.12] Wallet #2 retains 73% of BaseVLP; reward changes by +55% [0.73 x 1.12] Wallet #3 retains 91% of BaseVLP; reward changes by +93% [0.91 x 1.12] Wallet #4 retains 46% of BaseVLP; reward changes by -2% [0.46 x 1.12]

**Month 2: (F: +42%; 2.119 -> 3.012)**Wallet #2 retains 100% of BaseVLP; reward changes by +42% [1.00 x 1.42] Wallet #3 retains 0% of BaseVLP; reward changes by -100% [0.00 x 1.42] Wallet #4 retains 100% of BaseVLP; reward changes by +42% [1.00 x 1.42]

**Month 3: (F: +87%; 3.012 -> 5.620)**Wallet #2 retains 38% of BaseVLP; reward changes by -28% [0.38 x 1.87] Wallet #4 retains 100% of BaseVLP; reward changes by +87% [1.00 x 1.87]

**Outcome -> Since Normalization Factor (F) is a monotonically increasing function, the incentives become greater over time for wallets to continue holding their BaseVLP for the full 12 month hyper VLP event.**Last modified 4mo ago