Introduce Fair Rate

What is the "Earn for Nothing" problem?

Since Balancer will distribute week 1's mining reward on week 2's Wednesday, it's possible that a user can join the vaults just before the harvest and gain the previous week’s reward without contributing anything.

Fair Rate

To prevent this arbitrage, we introduce a “Fair Rate” which is about 1 week’s APY (currently set to 1.5%) and it is charged when users withdraw from the vault. The charged rate will stay in the vault and re-invest into the strategy. We believe this Fair Rate can protect us from arbitrage and reward long-term users.
Copy link
Outline
What is the "Earn for Nothing" problem?
Fair Rate