Reward Allocation & IL Reserve Fund

Yield distribution in the Prime Yield Strategy is dynamically adjusted between user rewards and the IL Reserve Fund. The allocation mechanism considers two independent indicators:

• Portfolio IL% (instantaneous drawdown level)

  • IL = 0–2.99% → 10% of daily yield allocated to the reserve fund

  • IL = 3–4.99% → 15% of daily yield allocated

  • IL ≥ 5% → 20% of daily yield allocated

• IL Recovery Days (IRD)

$$IRD = \frac {(Unrealized IL – IL Reserve Fund)} {Daily\_Yield\_Allocated\_to\_Reserve}$$

• IRD = 90–119 days → 15% allocation

• IRD ≥ 120 days → 20% allocation

Priority Rule:

When both metrics apply, the system chooses the higher allocation rate to ensure faster IL recovery.

• Example:

  • Portfolio IL = 3% (→ 15% allocation by IL%)

  • IRD = 95 days (→ 15% allocation by IRD)

  • System chooses 15%.

• Another Case:

  • Portfolio IL = 3% (→ 15%)

  • IRD = 125 days (→ 20%)

  • The system prioritizes 20% allocation.

This dual-metric approach ensures that the IL Reserve Fund grows proportionally with both real-time risk and projected recovery time, striking a balance between maximizing user yield and ensuring long-term sustainability.