Concentrator: a Yield Maxi's dream
Concentrator by Aladdin DAO maximizes Convex APYs and earns yield in the best DeFi tokens
Concentrator is a yield enhancement tool designed to increase the returns on Convex vaults by consolidating all rewards into auto-compounding top-tier tokens such as aCRV (cvxCRV) and aFXS (cvxFXS/FXS).
aCRV and aFXS are two different types of tokens representing a share of an auto-compounding Concentrator vault. A different farming strategy backs each one, and all farming yields generated by each strategy are automatically reinvested into more of the underlying token. This is done through an “auto-compounding” process, where the rewards earned are automatically reinvested into the same assets, generating compound interest over time. This continuous process creates a positive feedback loop, leading to higher yields.
The total amount of underlying tokens in the auto-compounding Concentrator vault can be calculated by multiplying the total Auto-compounding token balance by the current index. For example, the amount of cvxCRV contained in the vault can be calculated as follows:
cvxCRV_Balance = aCRV_Balance * Current_aCRV_Index
Similarly, the amount of cvxFXS/FXS contained in the vault can be calculated as follows:
cvxFXS/FXS_Balance = aFXS_Balance * Current_aFXS_Index
Using aCRV/aFXS to represent a share of the underlying compounding vault simplifies the smart contracts and makes them more gas-efficient. Additionally, it creates a simple, single, bridgeable token that represents an increasing amount of the underlying token. This makes it easy for users to track their investments and move their assets between platforms or wallets.
It works by automatically reinvesting the rewards earned from the staked assets into the highest-yielding tokens available, thus maximizing the overall returns for the user. This is achieved through auto-compounding, creating a positive feedback loop leading to higher yields. Concentrator also helps minimize the risk associated with staking by diversifying the assets across multiple high-yielding tokens, reducing dependence on any single token or protocol. Concentrator is a powerful tool that can help users maximize the returns on their Convex vaults while minimizing risk and simplifying the staking process.
However, like most yield farming platforms, it does charge a fee for its services. The fee structure of Concentrator is designed to be simple and transparent, with a standard 10% fee applied to the yields earned during the harvest process.
The fee is automatically deducted from the yields the users earn during the harvest process and is split between two primary recipients: CTR lockers and the Concentrator treasury. CTR lockers hold the native token of the Concentrator platform. The portion of the fee allocated to them rewards them for their support and incentivizes them to continue holding and using the token.
The portion of the fee allocated to the Concentrator treasury covers the platform's operating costs, such as development and maintenance, and funds future expansions and upgrades. The treasury is also used to provide liquidity to the platform, which helps to ensure that users can always buy and sell their assets at a fair market price.
It's worth noting that the 10% fee is considered a standard fee for yield farming platforms, and also it applies to yields only, which means that it does not apply to the initial deposit made by the user.
CTR tokenomics work similarly to Curve's ve tokenomics, a token representing governance power on the Curve platform. CTR holders can lock their tokens for up to 4 years to earn veCTR; ve strength will be determined by the amount locked and the remaining lock time.
The veCTR token represents governance rights on the Concentrator platform, including allocating 50% of all Concentrator's revenues. The community can vote on allocating these revenues, and most of the revenue will likely be distributed to veCTR holders. The revenues for Concentrator are denominated in aCRV, representing actual yield from fair fees paid by real users.
The total maximum supply of CTR is 5,000,000, and all of these tokens will be emitted by the end of the IFO.
The Initial Farm Offering (IFO) is a fundraising mechanism for the Concentrator protocol. It allows users to deposit their Curve LP tokens into unique IFO vaults, similar to the regular Concentrator vaults. The main difference is that instead of the harvested yields being swapped to aCRV or aFXS, they are exchanged for CTR tokens. This means that for every one aCRV yield harvested, users will receive 1 CTR token as a reward.
The IFO is designed to democratize ownership of the Concentrator protocol and raise funds for the Concentrator treasury through aCRV. The CTR tokens received during the IFO can be locked to receive veCTR, which gives holders governance rights within the Concentrator protocol. This includes the allocation of 50% of all Concentrator revenues, which are denominated in aCRV.
The maximum total supply of CTR is 5,000,000, and all of these will be emitted by the end of the IFO period. In addition, there is no team or investor allocation of CTR and no involuntary lockups or vesting. This means that users can lock their CTR and begin directing and receiving platform revenue within a few weeks of the IFO period.
The IFO is a new way to fund the project and the team. It's a new way to distribute tokens and allow users to own some part of the project and even govern it. The IFO will distribute 50% of these tokens to IFO farmers. This means that users will have complete control over their tokens and can lock them to earn veCTR within a few weeks of the IFO period.
After the IFO, the fee structure of Concentrator will be rebalanced to ensure that the protocol is sustainable, that veCTR token allocations are attractive, and that users continue earning much more by using Concentrator. This will be important to ensure that the platform continues operating and improving while rewarding its users and supporters.
Overall, the CTR tokenomics on Concentrator is designed to be fair and transparent, with a standard allocation of 50% of revenues to veCTR holders and the ability for users to lock their CTR tokens to earn veCTR. This allows users to direct and receive platform revenue while ensuring that the platform is sustainable and can continue providing value to its users.
Overall, Concentrator provides a convenient and efficient way for users to deposit their Curve LP tokens or zap and earn maximum returns on their investments by staking them in Convex vaults and then auto-compounding the rewards earned into high-yielding tokens such as aCRV and aFXS. This allows users to simplify the staking and managing of their investments while minimizing the risk associated with staking.
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