When you harvest your yields from our vaults (collect rewards), we give you 70% of your earnings in LP tokens (e.g., DOT-BNB LP), and the other 30% we calculate their worth in BNB then issue our native PINK tokens based on the PINK/BNB mint ratio. This is based only on your profits, your principal remains untouched (The mint rate will be monitored and adjusted periodically to accommodate the fluctuating price ratio of PINK/BNB).
The PINK token will launch at a price of $0.10, so to give a real world example of what the numbers could look like, we’ll assume a mint rate of 4000 PINK per 1 BNB for the PINK Distribution. This rate would be for the PINK $0.10 IDO price and BNB price of $400. Keep this in mind for the hypothetical below. The numbers may change but the math stays the same.
Let’s say you’re farming in one of our vaults and you’ve earned 10 BNB of interest over time (not talking about principal amount). And let’s say that currently 1 BNB = $300, so total interest earned, if only receiving BNB rewards, is $3000.
The payout on Dot.Finance wouldn’t just be 7 BNB ($2100) + $900 worth of PINK tokens.
Remember, PINK is issued at 4000 PINK for 1 BNB and 30% of your profits is 3 BNB. So, when you withdraw, you get 7 BNB + (3 * 4000 PINK) or 7 BNB + 12,000 PINK.
For example, if the PINK price is $0.10. At this price, the return would be 7 BNB worth $2100 + 12,000 PINK worth $1200, for a total of $3300. That’s $300 more than just getting the BNB!
PINK only has to be worth $0.075 in the above example to beat the return of $3000. Because we issue PINK instead, and PINK is unlikely to go under the IDO price, you will get more yields with the PINK Distribution as compared to the value of receiving just BNB.
The PINK distribution will always act as a multiplier on top of the APR as long as 1 PINK is worth more than the mint ratio of PINK:BNB.
The auto-compounding + PINK Distribution makes your APY even higher.