Yield Subsidization

Lenders and borrowers in Orbit are provided with an additional source of yield, fuelled from the distribution of Orbit token incentives (whose value comes from Blast's native yield). While the baseline mechanism for incentives distribution is to be pro-rata based on value provided, there exists slight differences for lenders and borrowers.

Lender Incentive Distribution

The rate of ORBIT distribution to lenders are dictated based on two factors:

• Lent value: USDB-denominated value of lent assets

• Lending duration: duration of lending preset by lender

From which a distribution of incentives occur prorated by the below value of a lender:

$$valueLent\cdot distributionMultiplier$$

Where $distributionMultiplier$ is a multiplier value that increases with the lending duration:

$$distributionMultiplier=\left(1+\frac{lendingDuration}{1year}\right)$$

Lenders are incentivized to set higher lending durations if striving to maximize their stake of ORBIT distributions, which in turn improves the stability of Orbit's asset liquidity and borrow interest rates.

Borrower Incentive Distribution

The distribution rate of ORBIT incentives to borrowers are determined purely pro-rata on the borrowed value. The total amount of distributed incentives given to a borrower increase as the borrowed value and the period of borrowing increases.