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Use circulating supply for yield bonus calculation #114

Open micahalcorn opened 10 months ago

micahalcorn commented 10 months ago

This was discussed a couple of months ago and we weren't sure how we wanted to calculate the yield bonus in Proof of Yield.

Option A (existing)

Option B (preferred)

The point of the yield bonus (aka boost or multiplier) is to communicate the premium earned by OETH holders thanks to collateral that backs OETH held in smart contracts. This additional collateral corresponds to OETH in circulation, not owned by the AMO. The problem with option A is that it includes protocol-owned OETH. While this portion of supply contributes to higher yield, it's fundamentally different and should be accounted for separately.

The problem is evident in the raw APY shown above the calculation. The raw, blended APY earned by the strategies in this example should be approximately 5.45%. The rate of 2.99% is not representative of anything meaningful.

Screenshot 2023-08-11 at 9 58 03 PM
micahalcorn commented 10 months ago

Recommended improvements:

* circulating supply is total supply minus OETH owned by the AMO