$ORBIT
The Orbit token (ORBIT) is Orbit's protocol token. ORBIT serves two major purposes within the ecosystem: 1) medium for forwarding future native yield and 2) protocol bootstrapping incentives.
Usage in Orbit Protocol
Medium for Future Native Yield Forwarding
The Orbit token acts as a core mechanism component to indirectly redistribute the native yield of assets in Orbit back to lenders and borrowers.
A direct distribution of Blast's native yield back to lenders and borrowers is invalid due to its cyclical nature - lending yield on Blast must be greater than (average market lending yield) + (native yield on Blast) in order to be competitive, but if incentives were to be directly sourced from the native yield (thereby decreasing what lenders / borrowers would have gotten otherwise) the protocol ends up offering the same average market lending yield at equilibrium.
The solution is to bring forward value from future native yield to the present. The Orbit token acts as the facilitator for this process by first accumulating native yield to itself (its considered valuation thus also including future yield value) and then using ORBIT inflations to incentivize lenders and borrowers.
Liquidity Bootstrapping Incentives
ORBIT also serves as adjustable incentives to either further boost adoption or slow it down when the protocol is overheated.
A direct distribution of native yield to lenders / borrowers limits the rate of incentives distribution to be purely decided on current protocol metrics, making incentive amounts difficult to adjust as needed. On the contrary, bootstrapping through this indirect approach offers much more flexibility as the inflation of ORBIT can be made flexible. The protocol can overspend beyond the provided native yield value as stimulus is needed and underspend as the protocol overheats.
Value Accrual
ORBIT tokens accrue value from various mechanisms of the Orbit protocol.
Open Market Purchases
Blast's native yield are used to purchase ORBIT tokens from the open market such as a DEX.
Staking Rewards
Stakers of ORBIT receive rewards in:
$ORBIT yield that scales with length of time
Boost in Blast Gold
The portion of Orbit's Blast native yield used as staking rewards start at 100% at protocol genesis, linearly decreasing to 0% over a 4-year period.
Staking APY
Your staking APY changes based on the length of your staking. The APY scales in length, so the longer your stake time, (max length of 4 years) the higher the interest rate.
Weighted Distributions
Stakers are required to choose the lockup period for their Orbit, during which no unstakings can be made. Longer lockup periods are compensated with an amplified distribution of staking rewards. Note, when choosing a lockup period, the protocol will round the time down to the earlier week.
Staking rewards are amplified to be proportional to the below value of a staker:
Where is a multiplier value that increases with the lockup period:
Stakers are incentivized to set longer lockup periods in order to maximize their distribution of rewards, which in turn better aligns stakers to the long-term success of the protocol.
Boost in Blast Gold
We will be giving 20% of all of our Blast Gold points as a boost for people who lend/borrow AND stake $ORBIT. The boost is a capped multiplier that is percentile based. We will take a weight based on how much $ORBIT you stake and the length of time you stake.
Supply Removal
A portion of Orbit's Blast native yield is used to remove ORBIT from circulation via burning. This proportion starts from 0% at protocol genesis, linearly increasing to 100% over 4 years.
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