Karma Bond mechanics
Last updated
Last updated
A user bonds LP tokens (e.g. Token X/stable coin).
LP tokens go to the Karma Bond contract and are distributed to the corresponding protocol treasury contract.
The Karma Bond contract receives the protocol token at a discount from the protocol treasury.
The discounted protocol tokens are issued to the user based on the vesting period (e.g. 5 days).
The Karma Bond service charges a 3.3% fee on the protocol token pay-out.
The fee is sent to the Karma Finance Treasury.
The 3.3% fee charged by Karma Bond is quoted against a price oracle to determine the fee’s USD value. For every 1 USD worth of fees, 1 is minted. 90% of the minted goes to the user.
10% of the minted goes to the early contributors.