Clarifying cbBTC and USDC incentives

Governance General
1

Following some users requesting further clarification of how incentives are calculated for cbBTC as mentioned in the onboarding proposal, we are further clarifying the criteria and high-level calculation steps.

  1. Eligibility Criteria:
    • Users must hold cbBTC as collateral and USDC as debt to qualify.
    • If users have multiple collateral assets, only the borrowing power of cbBTC is considered.
    • If users have multiple debt types, only USDC debt is counted.
  2. APR Calculation:
    • The APR is determined based on the following formula:APR = f(min(USDC debt, cbBTC value * max LTV)
    • This formula considers the lower value between the user’s USDC debt and the maximum loan-to-value (LTV) for their cbBTC holdings.
  3. Boosters:
    • There are two unique boosters that users can activate, each providing a multiplier applied after the main rewards calculation:
      • Collateral Switch: Switching collateral from wBTC to cbBTC. This booster can only be activated once per user.
      • Debt Switch: Switching debt from USDT to USDC. This booster can also only be activated once per user.
  4. Rewards Distribution:
    • Positions are reviewed, and rewards are distributed on a weekly basis.
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