The Factor Scale emissions multiplier ensures that users that contribute the most network security (i.e. economic security through staked FCTR) also receive the most rewards for staking their liquidity into various strategies. By assigning a weight to the user's staked liquidity, the emission multiplier rewards users holding more veFCTR with a greater share of the strategy's allocated rewards.
TLDR
The higher the proportion of veFCTR supply held, the larger the share of strategy emission rewards.
Emission Multiplier Flow
User stakes FCTR to receive an amount of veFCTR depending on staked duration (up to 1FCTR:1veFCTR for max stake duration).
User provides liquidity to the target strategy which is eligible for Factor Scale emissions.
User stakes the liquidity position in order to be eligible for rewards.
With the veFCTR obtained in 1, user votes for their target strategy on Factor Scale.
When the voting period for the epoch ends, the total emissions allocated for the epoch is distributed in proportion to the number of votes that the strategy receives. (i.e. if strategy receives 10% of total votes for that epoch, it receives 10% of emissions).
For each strategy, the allocated emissions amount is then distributed over the course of the epoch according to the gauge weighted liquidity provided by LPs who have staked their liquidity in the strategy.
Emissions Multiplier Model
You can view the expected multiplier based on your veFCTR and strategy deposit proportions in the Emissions Multiplier Model.
Weighted Liquidity Formulas
At it's core, the emissions multiplier ensures fairer distribution of emission rewards by constantly comparing:
Proportion of staked liquidity the user contributes to a specific strategy:
In general, the larger the proportion of veFCTR supply held, the larger the emissions multiplier.
Weighted Liquidity
By applying a veFCTR holding weight to the staked liquidity provided by the user, it enables veFCTR holders to access up to 2.5x the emissions for their staked liquidity. The weighted liquidity for a user is calculated based on the following formula:
Based on the above formula, there are a few critical points to take note of:
Example
Users
Alice provides 100 staked liquidity but does not hold any veFCTR
Bloxy provides 100 staked liquidity and holds 50veFCTR
Conditions
Total veFCTR supply (including Bloxy): 500veFCTR
Emission rewards allocated to strategy: 1,000 esFCTR
Alice's Weighted Supply
Bloxy's Weighted Supply
Emissions Distribution
This example builds upon the Baseline example. Changes to calculations are highlighted in bold.
Users
Alice provides 100 staked liquidity but does not hold any veFCTR
Bloxy provides 10 staked liquidity and holds 50veFCTR (50% -> 10% of stakedLiquidity)
Conditions
Total veFCTR supply (including Bloxy): 500veFCTR
Emission rewards allocated to strategy: 1,000 esFCTR
Alice's Weighted Supply
Bloxy's Weighted Supply
Emissions Distribution
Observations
Change: Bloxy reduces staked liquidity proportion to match veFCTR supply proportion.
Result: Based on the new staked liquidity, Bloxy receives ~2.2x the esFCTR. Note that the capital efficiency as Bloxy's staked liquidity is reduced. Bloxy could have also chosen to acquire more veFCTR to get a higher multiplier. The maximum multiplier is also dependent on the strategy's liquidity as well as ttotal veFCTR supply.
This example builds upon the Baseline example. Changes to calculations are highlighted in bold.
Users
Alice provides 100 staked liquidity but does not hold any veFCTR
Bloxy provides 100 staked liquidity and holds 150veFCTR (100 more than baseline -> 25% vs 10% of veFCTR supply)
Conditions
Total veFCTR supply (including Bloxy): 600veFCTR
Emission rewards allocated to strategy: 1,000 esFCTR
Alice's Weighted Supply
Bloxy's Weighted Supply
Emissions Distribution
Observations
Change: Bloxy holds an additional 15% of veFCTR supply.
Result: Bloxy gets an additional 136esFCTR which is a 1.27x multiplier.
This example builds upon the Baseline example. Changes to calculations are highlighted in bold.
Users
Alice provides 100 staked liquidity but does not hold any veFCTR
Bloxy provides 200 staked liquidity and holds 50veFCTR
Conditions
Total veFCTR supply (including Bloxy): 500veFCTR
Emission rewards allocated to strategy: 1,000 esFCTR
Alice's Weighted Supply
Bloxy's Weighted Supply
Emissions Distribution
Observations
Change: Bloxy stakes an additional 100 liquidity and now owns 66% of strategy staked liquidity.
Result: Bloxy gets an additional 210esFCTR which is a 1.42x multiplier.
This example builds upon the Baseline example. Changes to calculations are highlighted in bold.
Users
Alice provides 100 staked liquidity but does not hold any veFCTR
Bloxy provides 100 staked liquidity and holds 50veFCTR
Charles stakes FCTR to increase the veFCTR supply by 250veFCTR but does not provide liquidity nor vote on Scale (i.e. pure increase in veFCTR supply)
Conditions
Total veFCTR supply: 750veFCTR
Emission rewards allocated to strategy: 1,000 esFCTR
Alice's Weighted Supply
Bloxy's Weighted Supply
Emissions Distribution
Observations
Change: veFCTR supply increases by 50% resulting in Bloxy only holding 6.67% of veFCTR supply (down from 10%).
Result: Bloxy gets an additional 45esFCTR which is a 1.09x multiplier.
This example builds upon the Baseline example. Changes to calculations are highlighted in bold.
Users
Alice provides 100 staked liquidity but does not hold any veFCTR
Bloxy provides 100 staked liquidity and holds 50veFCTR
Charles provides 100 staked liquidity but does not hold any veFCTR
Conditions
Total veFCTR supply (including Bloxy): 500veFCTR
Emission rewards allocated to strategy: 1,000 esFCTR
Alice's Weighted Supply
Bloxy's Weighted Supply
Charle's Weighted Supply
Emissions Distribution
Observations
Change: The strategy's staked liquidity increase by 50% resulting in Bloxy owning 66% of the staked liquidity (compared to 50%).
Result: Bloxy rewards drops by 80esFCTR due to liquidity dilution.
The maximum emissions multiplier is achieved when the proportion of veFCTR supply held by the user approaches the proportion of strategy staked liquidity (i.e. veFCTR% approaches StakedLiq%).
When veFCTR% is greater than StakedLiq%, the rate of multiplier decay is slower than if veFCTR% is lower than StakedLiq%.
stakedLiq%=stakedLiqpoolâstakedLiquserââ
As Factor enables users to increase their capital exposure via Leverage strategies, the stakedLiquidity amount also takes into account the leveraged portion by utilizing the debt portion of the user's position. That is, stakedLiquidity for leveraged positions tracks the debt value.
The above formula is used to calculate the weightedLiq for every depositor in the strategy, including those who do not have veFCTR staked. The esFCTR emissions allocated to the pool for that epoch is then linearly streamed throughout the epoch based on the proportion of the strategy's weightedLiquidity that the user holds at that point in time.
The maximum emissions multiplier of 2.5x occurs when the StakedLiq%approaches the veFCTR%
When veFCTR% is greater than StakedLiq%, the rate of multiplier decay is significantly slower than if veFCTR% is lower than StakedLiq%
Put simply, the weighted liquidity formulas prioritizes distributing emissions towards users with larger veFCTR% (i.e. users who have staked more FCTR for longer periods). For the same absolute % difference, your emissions multiplier will be much higher if your veFCTR% is greater than StakedLiq%. To achieve the max multiplier, your veFCTR% should be closer to StakedLiq%.
Assume no other users in the strategy hence stakedLiqpoolâ=stakedLiqAliceâ+stakedLiqBloxyâ=200
