Spool Tech Docs


The Spool Ecosystem accrues Protocol Generated Revenue through the Performance Fees of Spool. When Users generate profit, 8% of that profit is collected as an Ecosystem Fee which is later on used to create SPOOL/DAI Liquidity Pool Tokens on Uniswap V2.
The aforementioned means that 50% of this profit gets converted into SPOOL Tokens by means of buying them. The remaining 50% of this fee is matched to create Liquidity Pool Tokens.
These LP Tokens are distributed back to SPOOL Token Stakers relative to the amount of SPOOL Tokens staked by a given User versus the total amount of SPOOL Tokens staked.

Technical Implementation

Liquidity Pool Tokens are created on Uniswap V2 through adding liquidity following the process described in previous paragraphs. These LP Tokens are sent to rewardDistributor. The Spool Multisignature Wallet adds these LP Tokens as a reward and in turn the LP Tokens are distributed to SPOOL Token Stakers over a given period of time.

An example

User X deposits $100 into a given Spool (Vault), over the course of a year $10 in yield is generated and in turn User X generated a total of $10 in profits. Over the generated profit a performance fee is charged equating to 10% or $1 in this particular example. 80% of that $1 is distributed back to SPOOL Token Stakers through the mechanism described on this page (equating to $0.80 in total), while 20% ($0.20) is sent to the Spool DAO Treasury.