Vault Based Incentives


Vault Based Incentives (VBI) enhances the efficiency and effectiveness of incentivization within Quasar Vaults. This feature allows protocols to directly incentivize Quasar vaults and their users, providing them with more control and ensuring that incentives are appropriately directed to the right users.

The Problem: Incentive Exploitation

Existing incentivisation systems, such as that on Osmosis CL pools, only provide incentives if a position/liquidity is in range. This allows for bad actors (such as a tick sniper) to exploit the incentives by providing a narrow range of liquidity and gaining the majority of incentives. This naturally means that the larger group of long term liquidity providers are de-incentivized and discouraged from providing liquidity due to inconsistent rewards. Solutions to solve such issue require a heavy computations workload that is not suited to blockchain limitations

The Solution: Vault Based Inventives

Vault Based Incentives (VBI) is a nearly off-chain execution for Protocols to allocate rewards directly to Quasar vaults, ensuring the intended user receive them.

It consists of an off-chain rewards indexer to calculate complex incentive infrastructures efficiently and an on-chain Merkle incentives contract for incentive execution.

This system optimizes the distribution of rewards, making it more consistent and fair for all participants. Additionally, Quasar governance mechanisms, such as $QSR boosts, further enhance the yield for users, creating a compelling environment for long-term participation and stable liquidity.

Key Benefits

For Users:

  • Higher Yield: Users receive all intended incentives, leading to higher overall yields.

  • Consistent Yield: Incentives are provided even if the vault's position is out of range, ensuring steady returns.

  • Optimized Yield: Simplified yet optimized yield distribution through pooled rewards, incentives, airdrops, and $QSR boosts via Quasar governance.

For Protocols:

  • Impactful Incentivization: More effective incentives, fostering long-term engagement from users.

  • Robust Liquidity: Promotes a healthier, more stable liquidity pool by attracting a larger group of liquidity providers.

  • For Osmosis: The strategy reduces the workload on their blockchain, leading to increased efficiency and smoother operations.

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