💰Rewards (Drain)

An overview of "The Drain" which harvests and distributes rewards on Dracula Protocol V2.

ATTENTION: This document is a rough draft and hasn't been fully developed yet.

The contents here-in may be incomplete, out-of-date, and modified radically in future revisions.

After each execution of The Drain any user earned ETH or DRC yields may require up to 48 hours to appear available for harvest.

Staking Tokens on Dracula Protocol / Drain Allocation:

Each day Dracula Protocol performs a Drain that liquidates rewards earned using the staked LP tokens from victim platforms and swaps the underlying platforms' reward tokens for ETH.

Reward Distribution on Dracula Protocol	% of Rewards Earned
Victim Pool Liquidity Providers	85%
DRC Single-token Pool	3.75%
DRC-ETH UNI-V2 Pool	6%
Developer Fund	3.75%
Gas Fund (to fund on-chain transactions)	1.50%

Each Drain is funded by a portion of the underlying reward yields harvested from the victim pools.

85% of rewards go to Staked victim LP token providers

The awarded funds are automatically invested into an interest-earning ETH strategy which accrues compounding yield until a user chooses to harvest their individual earnings.

All earnings collected through the Drain compound in ETH. Users can choose to harvest their earnings in ETH -or- DRC regardless of the pool. If a user opts to harvest their earnings in DRC their share of ETH is swapped for DRC on the open market at the time of the withdrawal.

IMPORTANT: Withdrawal (unstaking) within the first 24 hours of a LP token deposit (staking) incurs a non-negotiable 0.5% fee against the value of LP tokens withdrawn from the victim pool. This fee is to help prevent manipulation of the drain mechanism.

After each drain, these rewards are linearly distributed to each user over the following 24 hours, which will ensure consistent yields rather than spiked earnings after each drain.

Every 24 hours at approximately 12 UTC the Dracula Protocol executes a process known as The Drain. This process claims all earned rewards from the underlying platform (SUSHI, DODO, etc.) victim pools.

Once The Drain has completed all reward claims the process executes sale orders on all rewards exchanging the tokens for ETH. The ETH is invested in a RARI vault that generates additional value through compounding interest on the deposited ETH.

The Drain is executed by the Dracula Team and is funded by a portion of the underlying reward token yields from victim platforms.

For more information about how the Drain is allocated see our Tokenomics section.