Arcana Points Program

To bootstrap liquidity for the Arcana protocol and arcUSD—and incentivize early users with a stake in future protocol governance—Arcana is launching with a points program that rewards ecosystem participants during the growth phase of the project.

Points program earnings can be easily tracked in the Arcana UI.

After TGE and airdrop claims, the ARCANA token will accrue 5% of protocol yield to stakers, giving it an immediate role in the ecosystem.

Points Program Design

There will be a fixed amount of points designated for distribution each day based on user activity and their TVL in the protocol.

arcUSD holders accrue the daily base reward, a 1x multiplier on their holdings. In this manner they're earning both protocol yield and incremental value in the form of a future ARCANA governance tokens.

Users will also have the option to deposit arcUSD into the PTa vault, forgoing native arcUSD yield in exchange for access to the 10x allocation in daily points rewards.

Daily Point Distribution:

1x (~9%) of all points are allocated to arcUSD holders

10x (~91%) of all points are allocated to PTa holders

At any time, the protocol reserves the right to reallocate future points distributions.

Additional rewards multipliers or activities may be added at any time.

Nothing will impact past rewards, but future rewards may be affected by these shifts.

Establishing Rewards Equilibrium

For each token deposited into PTa, the native yield on one arcUSD doubles. Increasing the yield on arcUSD supports protocol growth, token liquidity and various other ecosystem benefits through the liquidity flywheel.

Too few PTa stakers means low arcUSD yield and a less powerful flywheel. However, too many PTa stakers opt for points rewards over native yield, points incentives risk becoming overly diluted.

Lastly a volatile movement of funds between these two pools results in inconsistent rewards and returns which is generally unfavorable to users.

The program design we've established should naturally result in a reward equilibrium where both the arcUSD native protocol rewards and PTa points rewards users feel fairly rewarded for their support of the protocol.

PTa points accruals will begin 24-hours after new transfer to prevent program abuse. This includes new PTa received from the vault, tokens transferred between wallets or leverage transactions on Stack. If a transfer adds new PTa to a position or into a wallet balance, only the new amount will be delayed in points accruals. The existing totals will continue to earn points.

The chart below shows three scenarios where $5 million in protocol TVL, a consistent protocol yield of 30% and the 1x/10x allocation of capped daily points between the two tokens can yield very different rewards outcomes for a user with $10k to deploy.

It's hard to predict how the market will ultimately value ARCANA points vs arcUSD yield, but we're attempting to engineer the program in a manner that establishes consistent, reliable returns for all protocol users.

Maximizing Returns

Arcana points farmers are also eligible for the RWA Rewards Program, where Arcana TVL and Arcana assets used within the re.al ecosystem may entitle Arcana users to multipliers on their RWA rewards earnings. Arcana users simply need to sign-up for this program to begin earning RWA from their arcUSD and PTa.

Through our partnership with Stack, both arcUSD and PTa are approved collaterals in the borrow and leverage protocol.

For arcUSD can be borrowed against like any other collateral, however, the arcUSD native yield may, in some cases, outweigh borrowing fees to create a free, self-repaying loan. When leveraged, arcUSD yields can be looped to return multiples on the native yield to the user.

The same is true for PTa, which we can deposited as collateral and borrowed against, creating a low risk opportunity to farm Arcana with lower capital commitments. PTa can also be leveraged on Stack, looping up the native points multiplier. Dependent on the effective points multiplier, triple-digit points accrual is possible with Stack.

Stack vaults may also bring additional multiplier benefits to users through the aforementioned RWA Rewards Program.