Pilot Staking: Earn Protocol Revenue

Background

Unipilot has been live on Ethereum since November 2021, with v2 launching in April of this year to improve the protocol and to fix inefficiencies found with v1.

Now that Unipilot v2 has proven itself as a successful liquidity optimization protocol offering on average 3x higher returns for Uniswap v3 liquidity, we are at a stage where we can focus on improving $PILOT tokenomics and optimizing the usage of the revenues generated by the protocol. You recently voted to approve our tokenomics proposal, which included the concept of staking, and with that, we are now ready to launch $PILOT staking.

Pilot Staking

We’re thrilled to announce that Pilot Staking will launch on the 25th June. Staking will give the $PILOT token immediate utility and create a powerful flywheel effect, as an increase in TVL will lead to greater staking rewards, which incentivises the community to add more liquidity and spread the word about Unipilot, which then leads to an increase in TVL. It also allows our community to benefit from the success of the protocol.

How will it work?

The Unipilot protocol earns 20% of all revenues generated on the platform. Under the old model, all of this revenue was sent to the Index Fund, which already has a value of $245,000 at the time of writing. With the introduction of staking, you will be able to stake your $PILOT tokens on the Unipilot dApp to earn a share of protocol revenues. Initially, 40% of Treasury revenues will be distributed to stakers, though this percentage could change in the future.

Rewards will be distributed with every block and paid in $ETH, as chosen by the community. Stakers will be able to collect their $ETH rewards at any time, and remain in full control of their $PILOT, with the ability to unstake at any time without penalty.

How much will I earn?

As staking rewards originate from revenue earned by the protocol and not from inflationary $PILOT token rewards, returns are therefore not fixed. As TVL rises, the protocol will earn more revenue and staking rewards will increase.

Scenario 1: Returns in July

Based on current TVL, we expect the protocol to earn ~$7,000 of revenue in July, with 40% of this (~$3,000) being distributed to stakers in the month. If $50,000 of $PILOT was staked that month, users would be earning ~70% APR. If $100,000 of $PILOT was staked, it would be ~35% APR.

Scenario 2: If TVL doubles

If TVL doubled from its current level, the protocol would earn ~$14,000 of revenue per month, with 40% of this (~$6,000) being distributed to stakers per month. If $50,000 of $PILOT was staked that month, users would be earning ~140% APR. If $100,000 of $PILOT was staked, it would be ~70% APR. Remember, these returns are paid in $ETH and are not inflationary.

Also read our Improved Tokenomics article.