Escrowed CHARM
Escrowed CHARM (esCHARM) is the time vesting reward token used by the OmniDex protocol. Escrowed CHARM has an equivalent value to the standard CHARM token however it can only be converted to CHARM after a time lock has elapsed. This process is called vesting.
The purpose of Escrowed CHARM is to reward long-term investment in the OmniDex protocol and promote the sustainable value growth.
Earning Escrowed CHARM
Investors can earn Escrowed CHARM in two ways:
Providing trading liquidity through the OmniDex Liquidity Pool OLP
Staking CHARM in the CHARM staking pool
The reward rates and distribution of Escrowed Charm will be evaluated every month an may change in line with the overall OmniDex strategic objectives. Any changes will be announced through the OmniDex social media channels at least 7 days prior to implementation.
Using Escrowed CHARM
Escrowed CHARM is not a tradable token however it can be used to increase investor rewards within the protocol in two different ways:
Staked to earn rewards in the same way as the standard CHARM token
Vested over a period of one year to become actual CHARM
Staking esCHARM
Escrowed CHARM has it's own independent staking pool which can be managed via the 'Escrowed CHARM' console on the Earn Page. The operation and the rewards allocation to this pool are identical to the CHARM Staking pool which is discussed here
Vesting esCharm
The conversion of Escrowed CHARM into CHARM is managed via the 'Vest' Console of the Earn page. esCHARM tokens that are deposited for vesting will be converted into CHARM every second and will fully vest over 365 days. The balance of tokens that have been converted into CHARM will be claimable at anytime.
The Vesting console includes two separate vesting vaults
CHARM vault: is used to vest esCHARM tokens that were earned by staking CHARM
OLP vault: is used to vest esCHARM that was earned by supporting the OLP
Both vaults vest over the same time period however they differ in that they reserve different tokens during the vesting period.
Reserved Tokens
In order for esCHARM to vest, users must maintain a minimum staked balance for either OLP or CHARM for the duration of the vesting period. The token that is required is dependant on which vault is being used.
When vesting is initiated, the average amount of CHARM or OLP tokens that were used to earn the esCHARM rewards will be reserved by the vesting process. Any tokens that are reserved for vesting cannot be unstaked or sold without first withdrawing them from the vesting process. This can be achieved by using the "Withdraw" button on the Vesting Console and will also pause the vesting process.
Partial withdrawals are not supported, so users will need to withdraw and unreserve all tokens and pause all vesting. Any tokens that have already been vested into CHARM can be claimed as CHARM tokens and the vesting process for any remaining esCHARM tokens can be restarted at any time.
What Happens During Vesting
Vesting can be started, paused and restarted at any time provided that the user has sufficient reserve tokens availabe.
Depositing into vesting whilst existing vesting is ongoing is supported
esCHARM tokens that have been deposited for vesting will not earn rewards during the vesting period
Tokens that have been reserved as a part of the vesting process (CHARM or OLP) will continue to earn rewards and will be unreserved once vesting is complete
If a user does not have sufficient CHARM or OLP tokens available to reserve, then before they can vest their esCHARM tokens, they will first need to buy and stake either OLP or CHARM. The token that they will need will depend on which vault will be used to vest the tokens.
CHARM , esCHARM and Multiplier Points can be used interchangeably for the required reserve amount.
Example
Over time a user has held an average staked CHARM balance of 36,500 CHARM and has earned 3650 esCHARM tokens. The user now wishes to vest half of the esCHARM (1825) into CHARM
In order to vest the 1825 esCHARM the user will need to to maintain a minimum balance of 18,250 staked CHARM (50% x 36,500) for the duration of the vesting period and this staked CHARM will be automatically reserved by the vesting process
Each day 5 esCHARM will be converted into CHARM (1825/365) and this can be claimed by the user at any time. After 365 days all of the esCHARM will have become CHARM
During the vesting process the 18,250 CHARM that has been reserved will continue to earn rewards and after 365 days the reserved CHARM will be released and can be unstaked if required.
Note that this is simply an example and the actual ratios will depend on the average staked amounts and the rewards earned during the staking period.
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