Parachain Vault Strategy

Composable initially developed its parachain vault strategy for procuring its Kusama parachain, Picasso. This strategy was then revamped for procuring our eponymous Polkadot parachain, Composable. Now, this strategy has been repurposed again, and upon the launch of Mosaic phase 2, users will be able to migrate their staked funds to Mosaic, where they can earn attractive yield by providing liquidity in the system’s single-sided vaults.

Previous Uses of the Vault Strategy

Our team at Composable created the Parachain Vault Strategy as a unique way to incentivize user contributions to the tokens needed for obtaining a parachain at auction (KSM and DOT).

Users were able to stake ETH or any ERC-20 token asset in an unlocked multisig vault. While the assets were in the vault, the ERC-20 tokens were farmed to increase yield. 50% of the yield was collected by the Composable Treasury and automatically routed to buying more KSM/DOT in a centralized manner in addition to increasing the user’s stake in our parachain. These KSM/DOT were used to secure our parachains on both Kusama and Polkadot. The rest of the yield was returned to the user as a reward.

These strategies provided users with yield, exposure to our parachain auction, and LAYR, as the first set of strategies spanning both the Ethereum and Polkadot ecosystems. As Composable Labs has been active in the incubation of projects utilizing Composable’s stack, and given that Composable’s strategies had a large user base, it made sense to give our earliest contributors and community members access to projects incubated by Composable Labs. That’s why Composable also offered vault strategy stakers tokens from projects incubated by Composable Labs, which was mutually beneficial for the following reasons:

Stakers were able to get upside from the ecosystem that Composable is building, as well as earnings in LAYR.

Our incubation projects obtained an initial token holder base that will allow them to galvanize initial support as they go to market and ramp up for full releases.

During this initial vault strategy, we also introduced boosts to incentivize long-term staking. The boost offered major rewards: up to a 25% increase on users’ earned LAYR tokens (based on nominal amount), vested over one year. The full 25% amount was earned only after staking for the full program duration, with lower boosts delivered proportional to the number of days staked. Composable deployed this boost to users who stayed staked/deposited in our vault strategy beyond the initial staking period, with maximal rewards being delivered to those staking for 90 days. Withdrawing from the parachain vault strategy caused the user to forfeit the boost that was proportional to the amount withdrawn and the time they staked.

This vault strategy was initially launched on Tuesday 29th June at 10am CET. Users of these initial iterations of this vault have since been able to earn STRM and ANGL rewards in addition to their LAYR rewards, with STRM being the native token of Instrumental Finance and ANGL being the native token of Angular Finance. STRM tokens have already been distributed to earners in this strategy, and LAYR and ANGL tokens will be distributed upon their respective token generation events (TGEs), including any earnings generated from boosts.

Instrumental Finance was the first protocol that began tapping into the user base that Composable has built. This extinct program commenced the incentivization of the vaults from 3pm CET, October 18th, 2021 until December 6th, 2021, 12:00 UTC.

The incentivization program went as follows:

  • Instrumental Finance’s total Instrumental Token (STRM) supply is 100m tokens, with an initial FDV of $30m.
  • The program ran for 8 weeks, during which time 5% of Instrumental token (STRM) was distributed.
  • During the first 7 days, 3,250,000 tokens will be distributed. Afterwards, the second week saw 1,500,000 tokens distributed. Thereafter for the remainder of the program, 250,000 tokens were distributed.

Angular Finance was the second protocol to leverage our extinct vault strategies to generate traction and distribute its native tokens — ANGL. Angular Finance began incentivizing the vaults starting at 13:00pm CET on December 6, 2021 and ended on the 31st of January.

Below are details of the Angular incentivization program that is now expired:

  • Angular Finance’s total token supply is 100m tokens, with an initial FDV of $25m
  • The program ran for eight weeks, during which time 5% of ANGL tokens will be distributed.
  • During the first 7 days, 3,250,000 tokens will be distributed. The following week saw the distribution of 1,500,000 tokens, and the remaining duration of the program distributed 250,000 tokens.

Migration of Vault Strategy Funds to Mosaic

As mentioned, the launch of Mosaic phase 2 will unlock users’ ability to migrate funds from their participation in our vault strategy onto Mosaic. Once this migration period ends, the vault strategies will end.

In addition to the fees that liquidity providers (LPs) can earn from users transferring tokens via Mosaic, Composable will be incentivizing asset migration with boosted rewards on stablecoin and wETH vaults. Ahead of Mosaic’s phase 2 launch, the migration process will soon be displayed on Composable’s strategies page with a clear breakdown of the initial steps for users to ensure a smooth transition.

Users who participated in the original Composable vault strategies will also receive incentives in the form of LAYR tokens to incentivize a smooth migration. Hence, we see the migration as a mutually beneficial transition that allows Mosaic to launch with sufficient total value locked (TVL) while rewarding our users for continuing to support our core products.

Through these internal adjustments, Composable is setting both its projects and supporters up for success. We appreciate everyone who has contributed to our vault strategies up to this point, and we look forward to providing more yield as our infrastructure and projects progress.