Introducing Delegator Contribution Rewards

As Cap’s reserve completes its initial bootstrapping phase, we are now kickstarting delegations and borrowing at Cap. For that purpose, Cap will be publicly tracking delegation contributions, much like we are tracking cUSD user behavior. This will serve to identify key delegator partners on both Symbiotic and EigenLayer, as borrowing from Cap begins to come online.

Delegators will earn delegator contribution rewards (named “COGs”) for every dollar of delegations to Cap operators. A boost will be added based on loan to value figures, to ensure that Cap rewards go to productive delegations.

The program will last until the end of Cap’s Frontier program. COGs are completely separate from caps given as part of the Frontier program.

COG Calculations

Delegation rate

A base rate of COGs will be awarded to delegators based on the dollar value delegated to Cap operators per day. During the first month of tracking, delegators will earn twice as many COGs as usual. After this period, a lower rate will be awarded until the end of the period.

EigenLayer delegations will also have a 1 month early period, once Cap delegations go live on EigenLayer. Currently, only delegations on Symbiotic are tracked.

• Early epoch rate- 1 month from start: 10x
• Normal epoch rate: 5x

COGs will be awarded based on the following formula:

COGs awarded per day = Delegation value * Epoch rate * Borrow Boost

Borrow boost

In order to ensure that all delegations are productive, a multiplier will be added to delegations whose operators are borrowing. This boost will only be applied up to a 50% loan to value, as Cap does not want to encourage risky borrowing practices. The maximum boost multiplier will be 2x.

The following calculation will be used to boost COGs:

Boost = 1 + min(ltv, 0.5) * 2

Symbiotic rewards

Symbiotic has budgeted points to reward delegators and operators in Cap’s network. Points will be allocated to active participants of the network based on Symbiotic’s internal criterias.

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