Internal

Internal perspective on the motivations behind introducing a Revenue Share program for CRT stakers and offering a Line of Credit feature. It explains why these initiatives matter for the protocol’s growth, user engagement, and overall sustainability, and why we, as a protocol, are willing to effectively “pay” for these incentives by sharing fees or offering borrow‐friendly terms.

1. Revenue Share

A) Driving Adoption & Loyalty

  • Attracting More CRT Holders
    By offering a portion of the performance fee back to CRT stakers, we create a tangible reason for users to hold and stake CRT long‐term. This helps us bootstrap adoption and retain users who might otherwise flip or farm in other protocols.

B) Aligning Incentives

  • “Skin in the Game”
    CRT stakers effectively become co‐owners of the protocol’s success. By sharing performance fees, we align the interest of the protocol with that of its user base.
  • Reduced Sell Pressure
    As stakers earn additional yield via fees, they have less incentive to sell CRT.
  • Long‐Term Commitment
    A short, mandatory lockup (e.g., 3 days) creates enough friction that stakers don’t churn in and out daily. This fosters a more predictable capital base and gives the protocol time to optimize yield strategies.

2. Line of Credit

A) Capital Efficiency for Users

  • Attractive Value Proposition
    The ability to remain “fully farmed” in CRT while still tapping stablecoin liquidity is key. Instead of forcing users to unstake and lose yield, we let them borrow at a better than market rate. This encourages more capital inflow because users feel comfortable locking up stables, knowing they can still access liquidity.

B) Increase Protocol Stickiness

  • Lock‐In Through Utility
    When users see CRT not only as a yield‐bearing asset but also as collateral for a line of credit, they’re more likely to stick around. Their liquidity needs are met without them leaving the ecosystem.
  • Continuous Engagement
    Borrowers must remain engaged to monitor their positions, top up collateral if necessary (in other contexts), and repay their loans eventually. This keeps them active within the protocol.

C) Increased Yield

  • Protocol Borrow Rate
    If the protocol’s treasury is earning 7% from its lending investments via Kamino and Marginfi, and CRT charges 10% on borrowed stables, we retain a profitable margin. Because CRT takes a fee at the token level, we do not need to have such a high spread between lending and borrowing like on typical decentralized lending protocols, thus we can offer a better than market borrow rate which is also better yield than supplying to the lending protocols. For example Kamino JLP is at ~6% to supply USDC and 13% to borrow, this is a spread CRT can take advantage of. Kamino USDC

D) Market Positioning

  • Differentiation from Standard Lending
    Many DeFi platforms let you borrow stables by locking up volatile assets (like SOL). A stable‐on‐stable line of credit with near‐zero liquidation risk is unique, lowering friction for new users worried about price crashes.
  • Improved TVL Metrics
    By letting users stake CRT and borrow stables without leaving, the protocol keeps more TVL as there won’t be as much selling
  • Periodic Adjustable Fixed Rate Some borrowers prefer a simpler, predictable rate structure instead of fluctuating, utilization‐based APRs. By offering a “fixed” rate that adjusts periodically (e.g., weekly), users get short‐term stability without locking the protocol into a single rate forever. This ensures the rate remains competitive for borrowers while allowing the protocol to adapt in step with market conditions, treasury yields, and risk parameters.