The Dripper
When reward tokens are harvested, the resulting yield is received by the Dripper contract and slowly distributed to OToken holders. This smooths out the otherwise choppy yield and prevents attackers from being able to front-run large liquidity events for the protocol. Other yield sources, such as lending interest and redemption fees, do not go through the Dripper.
Below you can see how daily APYs changed after the Dripper was implemented:
Token | Dripper configuration |
---|---|
OUSD | 604800 (7 days) |
OETH | 1209600 (14 days) |
How it works
Here's a demonstration of the flow of funds for OETH:
Reward tokens (e.g. CRV) are earned by a strategy
Someone calls the harvest function to swap reward tokens for ETH
ETH proceeds from the harvest are added to the Dripper's balance
The Dripper gradually allows ETH to be available for distribution to the Vault
The Vault collects available ETH from the Dripper once per day via Chainlink automation
The drip rate is updated each time funds are collected (not when they are harvested/added)
OETH wallets grow due to the increase in the Vault's ETH balance
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