Discovering the Rewards Aggregator

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folksfinance.medium.com1m ago

Rewards Aggregator

Flexibility and sustainability have always been key pillars of Folks Finance. To design the best and most efficient incentives system we have implemented the folks rewards tokens and the Rewards Aggregator.

When users repay the interest on their loan or deposit their funds through Lock&Earn, they receive “Folks Rewards Token” or frToken a token that represents ownership of the incentives available for that pool. Here comes Rewards Aggregator, a unique feature of Folks Finance that is designed to be the intermediate point between the users and the incentives providers to distribute on the pools multiple incentives. Any third party (i.e. a protocol or institution) that wants to incentivize a specific pool on the protocol can send the rewards tokens to be added as incentives for this specific frToken. At the time of writing, two platforms are operating as incentives providers on Folks Finance: the Algorand Foundation through the Aeneas program and Algomint, which is incentivizing the goEth and goBTC pool with goMint.

Sustainable incentives with the Rewards Aggregator

Folks Finance has built a sustainable incentive method, breaking away from the DeFi status quo, and it is with this goal in mind that the Rewards Aggregator, a new way of incentivizing users, was born.

First, with Rewards Aggregator, you abandon the idea of unsustainable DeFi incentives, which move users from the “prosperous” protocol/ecosystem to the other; a pure game of speculation. Most of the lending protocol out on the DeFi market has taken inspiration from AAVE incentives with the only goal, the TVL.

TVL growth stems from users depositing and earning a high APR on governance tokens and borrowing at an APR lower than the incentive APR they receive. Resulting in borrow APR paid by the user lower than APR earned as incentives. For Folks Finance giving away governance tokens is nothing sustainable; a bubble that can quickly destroy a protocol and wipe out investors’ savings.

Abandoning this model we have simply designed the incentives as cashback on the loan’s interest repayment. Yes, because you feed the protocol Community Treasury and the protocol rewards you.

On the other side, the depositors get rewarded by using the Lock&Earn which aims to make the protocol more reliable. Both the systems use the frTokens to achieve the goals of rewarding “good” users. The users can swap the earned frToken in the Rewards aggregator immediately or by vesting them they can earn more incentives.

In fact, thanks to the Rewards Aggregator the vesting of the tokens can be chosen by the user avoiding the Earn & Dump which is often problematic with governance tokens.

How to use Rewards Aggregator?

With Rewards Aggregator, users can exchange their frTokens for the tokens available, whose list is constantly expanding.

Users have 2 options on what to do with their rewards:

Instantly exchange frTokens for available rewards at the current rate; Exchange frTokens at a more convenient rate by agreeing to vest the rewards for a determined cooling-off period.

Let’s break down these two ways.

How to instantly swap frTokens? Click on “Rewards Aggregator” in the navigation bar of the Folks Finance dApp. In the “Available to Trade section”, select the type of frToken to trade. Choose “Instant” and enter the amount you want to trade. Click on “Claim rewards”. If you’ve never used these rewards tokens, opt-in to them. Next, click on “Opt-in”. Click on “Exchange”. If you made all the steps correctly, you will get a confirmation message. How to vest frTokens? Click on “Rewards Aggregator” in the navigation bar of the Folks Finance dApp. In the “Available to Trade section”, choose the type of frToken to trade. Select the staking period and enter the amount you would like to stake. Click on “Stake Rewards”. Click on “Exchange”.

To learn more about how to fully employ the Rewards Aggregator functionality, switch to Folks Finance Docs where everything is spelled out step-by-step.

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