Burn Sources Details
Alpaca revenue comes from multiple sources and is collected under different smart contracts. We discuss below, in detail, the method by which each revenue source is collected and how they are used for buyback & burn.
Regular Income Streams
AF1.0's Lending Performance Fee
AF1.0's lending performance fee accrues in each lending vault based on the actual borrowing interest incurred.
Based on the actual borrowing interest accrued, the smart contract keeps track of the amount owed to the protocol, which is currently set at 19%. Refer to the Global Parameter page for all of the most up-to-date parameter values.
The accrued fee is withdrawn once a week from the vaults. Each week, we queue the transactions (one for each lending vault) to make withdrawals on Saturday, which then have to go through the 24-hour timelock.
The withdrawals are executed on Sunday whereby 4% of the 19% are used for buyback & burn.
Withdrawal transactions are initiated from the deployer address. But since they are made right before the buyback&burn, the funds are not kept in any wallet for a long period of time.
The buyback transaction hashes are published each week in a detailed spreadsheet.
This portion of the revenue is a regular income stream. Hence, the entire amount will be used for buyback&burn each week.
In order to check how much in fees has accrued in each vault, you can do the following:
Go to BscScan and enter the vault contract address
Go to “Contract” tab then “Read as Proxy”
Go to “reservePool”
The value is denominated in wei, so you must divide by 1E18 to read the value in the normal unit.
Note: Please note that these are the accrued fees that have NOT been withdrawn. Thus, if you check them right after the weekly withdrawals (e.g., Monday morning), they will have a low value.
AF1.0's Lending Vault Contract Addresses: BNB Chain:
Fantom:
AUSD Stability Fee
Stability fee accrues in AUSD, and the smart contract keeps track of the amount owed.
Refer to the Global Parameter page for all the most up-to-date parameter values.
The accrued fee is withdrawn once a week from the vaults. Each week, we queue the transactions (one for each lending vault) to make withdrawals on Saturday, which then have to go through the 24-hour timelock.
The withdrawals are executed on Sunday whereby 50% of the fees are used for buyback & burn.
Withdrawal transactions are initiated from the deployer address. But since they are made right before the buyback & burn, the funds are not kept in any wallet for a long period of time.
The buyback transaction hashes are published each week in a detailed spreadsheet.
This portion of the revenue is a regular income stream. Hence, they will use the entire amount for buyback & burn each week
AUSD stability fee accrues in 0xc44f82b07ab3e691f826951a6e335e1bc1bb0b51 wallet.
In order to check the withdrawals' transactions records, you can do the following:
Go to BscScan at this contract (StablecoinAdapter)
Check the “Withdraw” transactions performed by Alpaca Finance: Deployer
For example, this transaction is the withdrawal of the Stability Fee of 984 AUSD.
Automated Vaults' Management Fee
Management fee accrues in each AV in the form of the vault’s share tokens.
The share tokens are minted to management fee treasury wallets every time there is a deposit, withdrawal, or rebalance transaction.
We perform withdrawals of share tokens from the vaults once every two weeks to save on gas and swap fees, whereby 50% are used for buyback&burn.
Withdrawal transactions are initiated from the deployer address. But since they are made right before the buyback&burn, the funds are not kept in any wallet for a long period of time.
The buyback transaction hashes are published each week in a detailed spreadsheet.
This portion of the revenue is a regular income. Hence, they will use the entire amount for buyback&burn each week.
You can check the accrued fee by the following steps:
Go to BscScan and enter the vault contract address
Note: Vault contract address can be found by going to each AV info page.
Go to “Contract” then “Read as Proxy”
Go to “pendingManagementFee”
The value is denominated in wei, so you must divide by 1E18 to read the value in the normal unit.
Note: Please note that these are the accrued fees that have NOT been minted into share tokens. Thus, if you check them right after the weekly withdrawals (e.g., Monday morning), they will have a low value.
You can check the minted shares for management fees in this wallet: https://bscscan.com/address/0x7e2308437c2f4c8934214663dc8476037625a270
Perpetual Futures Exchange Fee
Perpetual Futures Exchange Fee includes Deposit/Withdrawal fee, Position fee, Swap fee, Liquidation fee and Flash Loan fee.
Based on the actual borrowing interest accrued, the smart contract keeps track of the amount owed to the protocol, which is currently set at 30% of the total fees collected. Refer to the Global Parameter page for all of the most up-to-date parameter values.
The Perpetual Futures Exchange Fee is accrued gradually in the diamondPool address, which will then be transferred to RewardDistributor address daily. Each week, we queue the transactions to make withdrawals on Wednesday to this address for burn at the end of the week.
The withdrawals are executed on Wednesday whereby 6% of the 30% are used for buyback & burn.
The buyback transaction hashes are published each week in a detailed spreadsheet.
This portion of the revenue is a regular income stream. Hence, the entire amount will be used for buyback & burn each week.
You can check the Perpetual Futures Exchange Fee that is reserved for burn at the end of the week in the 0xd69df14e0a622e9814dbc12574c2b7a5bf55d8ef wallet.
AF2.0's Lending Performance Fee
AF2.0's lending performance fee accrues in diamondPool address based on the actual borrowing interest incurred.
Based on the actual borrowing interest accrued, the smart contract keeps track of the amount owed to the protocol, which is currently set at 19%. Refer to the Global Parameter page for all of the most up-to-date parameter values.
The withdrawals are executed on Sunday whereby 4% of the 19% are used for buyback & burn.
The buyback transaction hashes are published each week in a detailed spreadsheet.
This portion of the revenue is a regular income stream. Hence, the entire amount will be used for buyback&burn each week.
You can check the AF2.0 Lending Performance Fee that is reserved for burn at the end of the week in the 0x0d5CD78A4268CB579bA7253a3279060F46541001 wallet.
Irregular Income Streams
Our burn strategy is to distribute the burns on a weekly basis so as to maximize the number of deflationary weeks. Short-term market sentiment is highly correlated with overall market conditions, and in our experience, doing large burns over 1 week does not have nearly as much of an impact as guaranteeing steady deflation of the ALPACA token every week indefinitely.
Irregular streams such as liquidation treasury and early governance withdrawal are burned gradually, if in surplus to emissions. The method by which we burn from irregular streams is the following. If burn from revenue is lower than the mint amount (which was normally the case before 3/2023 when ALPACA emissions ended), we withdraw from the irregular streams of ALPACA to be burned, such as liquidation treasury, so that the total amount of ALPACA burned that week(including the amount coming in from revenue) is up to slightly higher than the amount of tokens minted that week--to remain deflationary.
When burn from regular revenue is higher than minted ALPACA, if there are remaining funds in the liquidation treasury, we burn up to a certain amount per week from there, such as 30k-100k.
Alpies NFT Royalty
Alpies royalty fee is collected for secondary sales.
2.5% (out of 5%) of secondary Alpies' sales go towards buyback & burn.
You can track the royalties collected in the Alpies’ deployer contract address:
For the BNB Chain: 0x2bfdacF6CdBC3ECcb95E68ec448ECf3d0693F732 For the ETH Chain: 0x2bfdacF6CdBC3ECcb95E68ec448ECf3d0693F732
(Please note that the royalties are in wBNB and wETH respectively.)
Governance Vault’s Early Withdrawal Fee
Early withdrawal fee occurs when users make an early withdrawal from the Governance vault.
Since the fees are already in ALPACA, there is no buyback associated with this stream of protocol revenue.
50% of the early withdrawal fees goes toward burn while the remaining half goes towards the remaining Governance vault stakers.
The burn portion of the early withdrawal fees is stored in: 0x2bfdacF6CdBC3ECcb95E68ec448ECf3d0693F732
You can also check all the associated early withdrawal transactions by:
Go to BscScan at this contract 0x2bfdacF6CdBC3ECcb95E68ec448ECf3d0693F732
Go to the “BEP-20 Token Txns” tab. All the “Transfer In” transactions originated from 0xb7d85ab25b9d478961face285fa3d8aaecad24a9 are early withdrawal fees.
Liquidation Fee
Liquidation fee is not a regular income stream and only occurs when LYF positions are liquidated.
Liquidation fee wallet address is: 0x0FfA891ab6f410bbd7403b709e7d38D7a812125B
Automated Vaults' Withdrawal Fee
The AV's early withdrawal fee is not a regular income stream and only occurs when a user makes a withdrawal from Automated Vaults. It’s collected in the vaults' share tokens.
You can check the AV’s withdrawal fees in this wallet: https://bscscan.com/address/0x417d3e491cbaad07b2433781e50bc6cd09641bc0
Last updated
