Vaults
Earn Additional PROV II Strengthen Your Governance Power.
Overview
Providence offers two types of vaults, the Standard Vault and the Loyalty Vault. The Standard Vault provides users with opportunities to earn interest on their locked PROV tokens while the Loyalty Vault enables users to participate in a premium bond fashioned rewards system with the potential additional rewards.
Standard Vault
The Standard Vault allows users to lock their PROV tokens and earn interest from the redistribution of burn-mint mechanism fees. Here are the key features and mechanics of the Standard Vault:
Locking and Unlocking Tokens
Users connect their Metamask wallet to Providence.
Navigate to the 'Vaults' page and select the Standard Vault.
Users can review additional details and historical interest rates.
Select the amount of PROV tokens to lock and approve the transfer.
Interest Calculation and Distribution
67.5% of trading fees from the mint/burn mechanism are redistributed to the Standard Vault.
The interest is calculated using the formula: Interest = P × R × T, where:
P is the principal amount.
R is the forecasted interest rate based on historical data.
T is a one-year time period.
Interest is distributed daily, with 67.5% of the total burn-mint mechanism fees collected each day being allocated towards the Standard Vault for re-distribution. In order to exit the vault, users must undergo a seven-day exit period if they wish to withdraw their tokens. No interest is accrued during this period.
Loyalty Vault
The Loyalty Vault provides a chance for users to win a lump sum of redistributed protocol fees, akin to the design of UK premium bonds. Key features and mechanics include:
Participation and Draw Mechanics
Users lock their PROV tokens in the Loyalty Vault, each token representing one ticket. The Loyalty Vault will receive 17.5% of the total weekly burn-mint mechanism fees. From here, the Loyalty Vault draws will occur weekly with the selection process automated by smart contracts with complete random ticket selection.
Winning Distribution
The distribution of weekly recieved Loyalty Vault fees is displayed in the table below.
1st
50%
2nd
25%
3rd
12%
4th
6%
5th
3%
6th
1.75%
7th
0.75%
8th
0.5%
9th
0.25%
10th
0.25%
Withdrawal & Deposit Conditions
Upon withdrawing tokens from the Loyalty Vault, users will have a seven-day withdrawal period. When a user makes a deposit into the Loyalty Vault, their PROV tokens will be ineligible for the next draw to prevent vault manipulation.
NFT Passes
Users who meet the minimum capital requirement in the Lottery Vault will receive one-time use NFT passes for exclusive online Providence events. After maintaining the required capital in the vault for two months, users will receive a continual use ERC721 pass, which can be sold on the open market, should they wish to do so.
Minimum Investment
A minimum of 500 PROV tokens is required to participate in the Lottery Vault.
Roadmap and Release Schedule
The Standard Vault will be launched following the Token Generation Event (TGE) of PROV with the Loyalty Vault to be introduced at a later date.
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