Flows

Flows distribute protocol-generated value to applications, markets and integrations building on top of Polaris.

These incentive streams are funded by protocol activity and distributed in pETH or pAssets. Thus, ecosystem incentives are paid out using assets directly connected to protocol activity, without relying on inflationary POLAR emissions.

Flow Allocation

Flows are allocated to whitelisted contracts according to how much pETH or a specific pAsset they hold.

In general, the larger their share of that asset, the larger the share of the corresponding flow they receive, with stewardship also able to apply additional weighting where appropriate.

Flows can also include a temporary minimum allocation for selected recipients. This allows strategically important integrations or new markets to begin receiving meaningful flows before they have accumulated enough assets for the standard balance-based allocation to become effective.

Because these minimum allocations distribute protocol value before a recipient has earned it through normal usage, they are managed through stewardship and should only be used where the recipient is expected to create value for Polaris.

pETH and pAssets Flows

pETH flows are funded by pETH-denominated protocol activity, including bonding curve swap fees, Reserve Loan fees and pETH-to-POLAR conversions.

When these fees are processed, they are burned into the bonding curve floor. This increases the pETH floor, releases ETH from the reserve and uses that ETH to purchase pETH through the bonding curve before distributing the acquired pETH through pETH flows.

Also, each pAsset market generates its own independent flow funded by the interest paid by users who mint that specific pAsset, such as USDp or GOLDp.

Unlike pETH flows, every pAsset market routes a protocol-defined minimum allocation of this flow to the corresponding Earn Vault and to vePOLAR. The remaining flow can then be distributed to approved recipients building around that pAsset, including liquidity pools, vaults, structured products and other integrations.

Stewardship Role

Once configured, flows operate automatically through immutable protocol rules.

Stewardship determines which contracts are eligible to receive flows, which address receives them, any additional weighting applied to each recipient and whether a temporary minimum allocation should be used.

Recipients are expected to create value for Polaris in return for flow support. That value may come through liquidity, integrations, revenue sharing or other forms of ecosystem growth.