Factor Docs

Factor Scale

veFCTR Scale for Vault Rewards

To enhance the Factor ecosystem and promote fair reward distribution, we are introducing the veFCTR Scale. The model allows veFCTR holders to vote on which vaults should receive a reward boost and determine the percentage of the total boost allocated to each vault. This reward mechanism fosters decentralized and transparent decision-making while optimizing vault performance.

Vault Boosting Mechanism

The veFCTR Scale emits a predetermined amount of boost rewards each week. veFCTR (staked FCTR) holders vote to decide the distribution of these rewards across various vaults. The voting process assigns a weight to each vault's scale with higher weights resulting in larger reward boosts.

Voting and Boost Allocation

VeFCTR holders participate in a weekly vote to determine the distribution of boost rewards across the vaults. Users can vote at any time using a Quadratic Voting (QV) mechanism, allowing them to allocate their votes to multiple vaults (e.g., 50% of their votes to vault X and 50% to vault Y). The on-chain snapshot of the votes will be taken every week. Increasing a vault's scale weight by voting for it results in more reward boosts being allocated to that vault.
A minimum vote threshold has been implemented to ensure a fair distribution of rewards and avoid directing rewards to spammy or low-quality vaults. Vaults must surpass this threshold to be eligible for receiving boost rewards. This encourages users to carefully evaluate their choices and maintain the overall quality of the ecosystem.

Benefits of the veFCTR Scale System

Decentralized Decision-Making: The Factor Scale empowers veFCTR holders to influence reward boost distribution, promoting decentralization and community-driven decision-making.
Increased Vault Efficiency: By directing reward boosts to the most deserving vaults, the Factor Scale helps optimize vault performance and overall ecosystem efficiency.
Fair Distribution: The Factor Scale ensures that vaults receive reward boosts in a fair and transparent manner, based on community consensus.
Incentivized Participation: The Factor Scale encourages active participation in the Factor ecosystem and fosters a sense of ownership among token holders.