Yield Token

Yield Token(YT) represents all real-time yields from the underlying assets. Each Epoch will generate YTs with different serial numbers, and these YTs can only claim the rewards corresponding to their specific Epoch.

Buy YT

YT is not initially minted but is tracked by the contract. Users need to purchase YT in the contract to obtain it. The price of YT is determined by a bonding curve and a virtual AMM set by the contract. It fully accounts for supply and demand changes and incorporates a Dutch auction mechanism to achieve efficient price discovery. This is Zoo Finance's innovative mechanism, which we have named Dutch-VAMM

Harvest Rewards

Due to the Dutch-VAMM mechanism, YT cannot be completely bought out by users, and some will remain in the contract. The YTs remaining in the contract do not participate in the reward distribution. As a result, the rewards earned by the YTs purchased by users are greater than the yield of the corresponding amount of underlying assets.

For example, there are a total of 100 underlying assets, initially generating 100 PTs and 100 YTs. All YTs are initially held in the contract. Throughout the Epoch, 50 YTs are bought by users, leaving 50 YTs in the contract. Since the 50 YTs remaining in the contract do not participate in the reward distribution, each YT held by users represents the yield of 2 underlying assets.

At the end of an Epoch, users can harvest the rewards from the pool. Since each user purchases YT and holds it until the end of the Epoch at different times, a time-weighted calculation is required based on the duration of holding.

When a user purchases YT, a Time Weighted Point (TP) is recorded, calculated as:

$TP=m×W$

Where

• $m$ is the amount of YT purchased by the user;

• $W$ is the remaining time until the end of the Epoch at the time of purchase.

By summing up all users' TP, we can calculate each user's share, which will be used to distribute the corresponding amount of rewards.