Flywheel is a general incentives architecture which can be plugged directly into other protocols and mechanisms:
It's modular architecture supports various kinds of reward streams:
- per second emissions
- dynamic emissions from other sources
- liquid governance reward direction like Curve and Tokemak
It also supports virtual balances and boosting via the booster module.
Flywheel can be used to accomodate nearly any desired incentive behavior.
Incentives systems can be broken down into the following components
The "index" tells how many rewards have accrued per staked unit since the contract start. This is stored on a global and per user level.
Start the reward stream at some unit, usually 1 * some fixed point factor.
For a user, the index should match the current global index when they enter the strategy. This is accomplished by always accruing and syncing before mint or redeem actions. Likewise its applied across both users before a transfer.
If a user was in the market before, they should initialize to the same index the global unit started at, so they accrue all rewards proportionately.
As tokens are claimed they are accrued against the index so there is no double spending.
A user receives balance(user) / totalSupply() * accruedRewards() tokens.
The "claim" action locks in rewards and transfers them to the owner.
Initialization, Accruing, and Claiming together form the "core" of an incentives architecture. In Flywheel v2 they will be the immutable center, with other features plugging in.
There are several ways to carve up the weights on a given reward stream. Rewards can be given in absolute terms according to a fixed governance process (a la Compound TRIBE per block) or relative terms (a la Sushiswap MasterChef allocation points).
Some of the most effective structures give some or all of the emissions control to the token holders themselves through a liquid "Rewards delegation" procedure.
Flywheel v2 will support both of these use cases, and have the flexibility to accommodate many more through the configurable weights module.
The initial rewards calculation module "FlywheelDynamicRewards" will simply passthrough tokens that accrue directly to the strategy back to the depositors in that strategy.
Balance boosting is a way to virtualize a user's deposit weight in the strategy. This can be used for example to incentivize borrowing or apply vote-escrowed boosting.
The booster module is assumed to have correct accounting and state management.
To test:
- Set $MAINNET_ALCHEMY_API_KEY environment variable with an alchemy key
- run
FORK_BLOCK=14193630 npm run test:integration. Requires having foundry installed.