4. HIDE Distributions
There are two types of Distribution of HIDE.
Fee Recycling.
Token Supply Inflation.
These are calculated and applied every 8 hours, the Calculation Period.
4.1 Distribution Calculations
Once the burn has been executed for Fee Recycling (which, for the avoidance of doubt, does not occur for Inflation) the Distribution process is identical and shared between:
HIDE LPs in the HIDE Pairs.
LPs in Liquidity Pools, as directed by HIDE Stakers.
Noting that (1) and (2) are not mutually exclusive; HIDE holders can Stake for the HIDE Pairs.
4.1.1 General Waterfall
Firstly, we determine the proportion of distribution to the HIDE Stake Liquidity Pools, DStake:
Where S is the amount of HIDE Staked, H is the amount of HIDE in HIDE Pairs and λ is a decay factor based on Staking and economic value of Liquidity Pools (λ ∈ [0, 1]).
The residual is distributed to HIDE Pairs:
Distributions to LP Holders in any pool, from both sets, are treated identically whereby weightings are adjusted to reflect LPs selected lock-up periods.
4.1.2 Staked Pools
For each Pool i we consider two weightings.
Simple Stake Weighting
A ‘Geometric Average’ G of fees generated and staking. Here we use the amount of HIDE burnt as proxy for fees F.
We take the lower of the two weightings:
With λ defined for Equation (1) as:
The allocation to Staked Pools is as Equation (1) (repeated below) and the Distribution D for each Pool as a function of Stake is determined by:
Noting that:
For any Pool, a zero Stake will mean zero Distribution
A Pool that has generated zero fees will receive zero Distributions
If Staked Pools generate zero fees, all of the Distributions go to HIDE Pairs.
4.1.3 HIDE Pairs
The allocation to the HIDE Pairs is as in Equation (2):
The allocation to each Pool is simply a function of the amount of HIDE in each Pool, namely Hi/H.
4.2 LP Allocations
Having determined the Allocations to the respective Liquidity Pools, the allocation to the under- lying LPs considers the amount and duration of the liquidity provided (LP LockTime). The allocation method is identical, whether in HIDE Pairs or a general Liquidity Pool.
LP Tokens can be liquid (not locked) or Locked to a specific maturity, LockTime.
LPs are weighted by their proportion of LP tokens held, in their respective Pool, adjusted by a factor determined from the maturity of their LockTime.
We apply the risk square-root-of-time rule to solve for the weighting of each LP j in their pool i based on L as the amount of LP tokens held and T as the number of Calculation Periods remaining for the LockTime.
With the Distribution D for each LP:
For example, an eligible LP position that has a LockTime that is 4 times as long as another identically sized position in the same pool, will receive twice the amount of the HIDE Allocation.
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