In early 2022, we witnessed the Curve Wars, a battle between projects to gain liquidity from Curve. Protocols like Convex, Votium, Llama Airforce Union, and others provided incentives and additional features to entice CRV token holders to control the number of veCRV tokens. In 2023, we will see a similar war, the Pendle Wars, where protocols compete for the liquidity of Pendle Finance. One of the protocols participating in this war is Equilibria Finance, the first yield-raising platform for Pendle Finance. So, what is Equilibria Finance? Let’s find out in the article below!
Equilibria Finance is a yield farming project in the Arbitrum ecosystem that aims to optimize Pendle
It provides an easy-to-use platform for PENDLE token holders and liquidity providers to maximize profits.
Equilibria Finance uses a veToken model similar to Pendle Finance to increase the profits of liquidity providers (LPs) and provide additional rewards for PENDLE holders. In other words, Equilibria Finance operates on the Curve Finance platform similarly to Convex Finance.
Highlights of Equilibria Finance
veToken/Yield Booster Model
Similar to Curve/Convex and Balancer/Aura, Equilibria and Pendle also use the veToken/Yield Booster model to establish a lasting connection between users and protocols, maximize profits and rewards, and promote the development of the project.
Multi-chain governance
Pendle is currently launched on Ethereum and Arbitrum, but the protocol's governance token is only available on the Ethereum blockchain. This results in users having to pay more gas fees when staking PENDLE tokens to participate in voting. To solve this inconvenience, Equilibria Finance applies a multi-chain governance model that allows users to stake and participate in voting on many different blockchains.
Deflation Mechanism
Equilibria Finance has implemented two token destruction mechanisms to reduce the future supply of EQB, including:
Buyback and Burn: Equilibria will use part of the protocol fees to buy back EQB tokens and burn them.
Destruction during conversion: xEQB is the custody token of EQB. During the conversion from EQB to xEQB, part of the EQB will be destroyed. For example, if you redeem 100 xEQB after 2 weeks, you can only get 50 EQB, and the remaining 50 EQB will be destroyed.
Equilibria Finance’s operating model
Increase the income of PENDLE liquidity providers
Liquidity providers who provide Pendle through Equilibria can receive additional rewards in both PENDLE and EQB, even if they do not own any PENDLE. On the other hand, PENDLE holders can convert their tokens into ePENDLE and stake them to receive rewards in both PENDLE and EQB. Users can flexibly and conveniently exchange ePENDLE back to PENDLE. All of this is designed to optimize rewards for all participants.
Vote and Bribes
Equilibria Finance allows users to participate in scale voting to receive rewards from Pendle Finance and receive bribe rewards by holding vlEQB. vlEQB is a token that can be owned by locking up EQB or xEQB for a period of 1 to 52 weeks. The longer the EQB/xEQB is locked up, the more vlEQB you get, which in turn increases your voting weight.
Consultants and Partners
Advisors: Equilibria Finance is advised by Ouroboros Capital, a crypto hedge fund and advisor to the Radiant Capital project.
Partners: Equilibria Finance is currently a partner of Pendle Finance, Frax Finance, GMX, Camelot, and Aura Finance.
Token distribution speed and release plan
The allocation and distribution of EQB tokens are as follows:
Pendle LP Incentives - 45%: Distributed in proportion to PENDLE tokens received.
Developers and Mentors - 16.5%: Using a performance-driven model, locked for 3 months and then released based on the percentage of total locked value of Equilibria to Pendle / total PENDLE, meaning that development teams and advisors with higher total locked value will receive more EQB, up to 16.5% of the total supply.
Equilibria Treasury - 14,5%: 30% unlocked after TGE (Initial Token Generation), the remaining 70% will be released linearly over 2 years.
Liquidity Mining - 10%: Issued weekly as a reward to users, with an inflation rate of 1.1%, meaning that the next week’s issued tokens will be 1.1% less than the previous week.
IDO - 7.5%: 50% unlocked after TGE, then released linearly over 6 months.
Investors - 2.5%: locked for the first 3 months, then released linearly over 21 months.
Bootstrapping Incentives - 2%Airdrop - 2%
Token use case
QB is the governance token of Equilibria Finance. EQB holders enjoy the following benefits:
Participate in protocol governance
Participating in voting can get bribe rewards
Cost of Sharing Agreement
In addition, Equilibria Finance has a margin token called xEQB, which can be converted from EQB at a gradually increasing rate. For example, if a user converts 1 xEQB after 2 weeks, they will only get 0.5 EQB, while converting after 24 weeks will get 1 EQB. xEQB holders will receive the following benefits:
Share more expenses from different sources
Get more issuance rewards
The more xEQB held, the more rewards and fees users will earn from the protocol.
Summarize
That’s all the information you need to know about Equilibria Finance, one of the protocols participating in the Pendle War. I hope the information I provided helps you in your research and investment process. Good luck!
