Potential Yield Improvements

By directing funds to various yield-bearing strategies can set a higher cooperative reward outcome through several design mechanisms that align individual actions with collective benefits. Here are some potential approaches:

• Tiered Reward Multipliers: Introduce reward tiers that increase as the total amount of staked funds crosses specific thresholds. When a critical mass of participants cooperates by staking, the protocol activates higher multipliers for yields generated by the underlying strategies.

• Bonus Yield for Pooled Capital: Allocate a portion of the protocol’s revenue as a bonus pool. When staked funds are pooled together and deployed in yield strategies, a share of this bonus is distributed proportionally to participants, rewarding collective action over individual, isolated staking.

• Dynamic Rebalancing Incentives: Adjust staking rewards dynamically based on how efficiently the funds are being deployed into high-yield strategies. If a larger proportion of assets is concentrated and effectively managed, stakers receive additional yield rewards or reduced performance fees.

• Governance-Linked Rewards: Incorporate governance incentives where active participation in decision-making (e.g., voting on yield strategies) unlocks additional rewards. This not only encourages staking but also fosters community collaboration, which can lead to improved strategy performance and higher overall yields.

• Performance-Based Bonuses: Implement a system where a portion of the generated yield is set aside as performance bonuses. If the yield strategies outperform a predetermined benchmark due to high cooperation (i.e., concentrated staked funds), these bonuses are triggered and distributed to stakers.

Each of these mechanisms is designed to create a feedback loop where the more the community participates collectively, the better the performance of yield-bearing strategies. By emphasizing the benefits of pooling resources, the protocol naturally incentivizes participants to cooperate, aiming for a higher payoff outcome that surpasses the safe, lower-yield alternative.