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What are Victims?
A summary of what victims are, how they work, and how you and Dracula Protocol can make money by interacting with them.
Victims are protocols farmed by Dracula users which powers the APY you see in the Dracula Pools.
On a victim protocol, users deposit LP tokens and receive reward tokens.
To understand LP tokens, let's first understand how to get some.
First, a user typically deposits two tokens into a liquidity pool on an exchange, like Uniswap, or Sushiswap, which allows other people to make token swaps from one token to another.
This is known as 'providing liquidity'.
With that, the balance of both tokens leave their account, and user receives a "proof" that they have deposited the tokens. This "proof" is know as an LP token.
The user is now a 'liquidity provider', which is an important role in the DeFi ecosystem. The LP tokens they receive represent their overall share in the liquidity pool.
LP tokens increase in value over time due to being paid a fee, every time someone swaps the token. This fee is generally set at 0.025-0.03%, but can vary from protocol to protocol.
Users providing liquidity can deposit their LP tokens onto victim protocols (Sushiswap, Pickle, Dodo, etc.) to gain rewards.
However, they can deposit the same LP tokens to Dracula instead. Dracula will then sell the rewards to buy Ethereum (ETH), and then distribute it to the liquidity providers, as well as other parts of Dracula protocol, such as the DRC stakers, DRC-ETH liquidity providers, Gas fund, and Developer fund.
Last modified 1yr ago