$CBL Rewards Pool

Introduction

The $CBL Token Economy represents a first of its kind approach to on-chain private credit lending, providing participation in product TVL profits with built-in downside protection with $CBL Rewards Pool and the innovative yCBL yield bearing token.

At its core, yCBL represents a proportional claim on Credbull's lending profits, creating a direct link between TVL growth and $CBL holders. yCBL generates yield through a unique mechanism that captures up-to 100% of the profit generated from Credbull's lending products - LiquidStone, PureStone and all future products.

These profits flow into the $CBL Rewards Pool, backed by an asset allocation strategy of $CBL, T-Bills and yield-bearing stables. This diversified backing ensures stability while maintaining strong yield potential. Apart from generating yield, yCBL also contributes to $CBL's value in several ways:

• As the $CBL Rewards Pool grows through accumulated TVL profits, the conversion value of yCBL to $CBL increases, creating a natural demand for both tokens;
• The staking mechanism temporarily removes $CBL from circulation while participants earn yCBL, helping to manage token circulating supply, and
• Finally, the ability to trade yCBL on secondary markets provides additional liquidity options and potential price discovery mechanisms for the entire Credbull ecosystem.

$CBL Rewards Pool Value Flow

Details provided below.

(1) Generate Profit

Credbull targets an average of 5.0% annualized of the TVL it generates from its lending products as profit, each offering unique characteristics and value propositions:

• LiquidStone is a bespoke and diversified lending product within the Nest RWA Vault, offering high APY with 24/7 redemption flexibility. It features a sophisticated and dynamic portfolio allocation across three main assets, including short tenor invoice financing products, collateralized lending and tokenized T-Bills/yield bearing stablecoins. LiquidStone receives a 30% allocation of all TVL generated by the Nest RWA Vault.
  Read details on 👉LiquidStone
• PureStone, launching in Q1'25, is a private credit investment product designed for institutional, accredited and retail investors. It offers a 15% APY, structured as 10% fixed + 50% of product spread, equating to approximately 5%+ variable, with a 30-day commitment period. The product specializes in SME short-term invoice financing with 7-14 day cycles, fully collateralized by cash receivables with zero credit default risk. Read details on 👉PureStone

Both products contribute to the ecosystem's TVL profits on a 30-day cycle, creating a sustainable yield generation mechanism for the entire Credbull platform. Credbull is also launching several other products in Q2/Q3’25, including Senior and Junior tranches, offering APY of up-to 20%.

(2) Build $CBL Rewards Pool

The $CBL Rewards Pool serves as the central repository for all profits generated from the total TVL, employing an asset allocation strategy that adapts to market conditions. The pool's composition is actively managed between $CBL tokens, T-Bills, and yield-bearing stables, with the flexibility to adjust allocations based on market opportunities and risk management parameters.

This strategic approach allows for optimal balance between capital preservation and yield generation. The diversified backing is continuously monitored and rebalanced to ensure stability during market volatility while maximizing potential returns for participants in the ecosystem.

(3) Stake & Earn yCBL

The staking system allows participants to stake their $CBL with flexibility. There are no lock-up periods, and participants can redeem their stakes instantly at any time, 24/7. Participants earn yCBL tokens daily, with rewards distributed based on a time-weighted proportional share of the $CBL Rewards Pool. This system inherently rewards longer-term stakers with greater earnings, as the duration of staking directly correlates with reward accumulation. The mechanism is as follows:

Time-Weighted Reward Distribution Formula
For any participant i over period t:
Individual Reward = (Si × Di) / (∑(Sn × Dn)) × R
Where:
Si = Individual stake amount
Di = Duration of stake in days
∑(Sn × Dn) = Sum of all stake-days in the pool
R = Total rewards for the period
Daily yCBL Distribution = Individual Reward / Di

Time-Weighted Example
For example, let's say there are 3 participants staking over a 30-day period:
Initial Pool State:

Monthly Profits: $100,000

Participant A: 1,000 $CBL staked for 30 days

• Time-Weight = 1,000 × 30 = 30,000 stake-days

Participant B: 2,000 $CBL staked for 20 days

• Time-Weight = 2,000 × 20 = 40,000 stake-days

Participant C: 5,000 $CBL staked for 10 days

• Time-Weight = 5,000 × 10 = 50,000 stake-days

Total Time-Weighted Stakes = 120,000 stake-days

Distribution Calculation:
Monthly Profit Share = (Individual Stake-Days / Total Stake-Days) × Monthly Profits

This time-weighted approach rewards:

1. Larger stake amounts
2. Longer staking duration
3. Earlier participation in the staking period

(4) Hold or Activate

Participants in the Credbull ecosystem have three primary paths:

1. Stay Staked & Earn: Allows participants to maintain their staked position, continuously accumulating yCBL rewards through the time-weighted distribution mechanism. This strategy is ideal for those seeking to maximize their long-term yield potential and benefit from compound growth within the ecosystem.
2. Unstake yCBL Rewards: Enables participants to actively manage their earned yCBL rewards while keeping their original stake intact. Participants can periodically claim their accumulated yCBL and either convert to $CBL at the current pool ratio or trade it on secondary markets for potentially higher returns or immediate liquidity needs.
3. Unstake $CBL: Participants can withdraw their original $CBL stake entirely from the system. This option ensures participants maintain full control over their capital, with the ability to re-enter the ecosystem when market conditions or personal investment strategies align with their goals.

(5) Convert or Trade

Once participants have earned yCBL, they have two main options as described for utilizing their rewards. They can either convert their yCBL to $CBL or trade it on secondary markets such as Zerolend or Pendle. The conversion value of yCBL to $CBL is directly tied to the size of the $CBL Rewards Pool, with each yCBL token representing a proportional claim on the pool at the time of conversion. This creates a transparent and fair value distribution mechanism for all participants.