Re-defining Yield Farms
Self-sustainability with no mints.
The xTAO masterchef contract is unique and has functionality that doesn't exist in any other yield farm out there.
The xTAO masterchef contract was provided 15m xTAO (~60% of total supply) at launch. Since there are no mint functionalities in any of xTAO's code or contracts, eventually the farming contract would run out of rewards. To prevent this, the staking contract receives 1% of all xTAO transaction fees automatically and instantly after every transaction.
Interesting, how do emission rates work with this?
The masterchef contract dynamically determines what emission rates it needs to be self-sustaining forever using the
selfSustainRate()function in the contract. There is a daily buffer constant in the contract that is currently set at 260 days, the contract then uses it's current xTAO balance and determines the emission rate it can have to sustain itself for the next 260 days. The masterchef owner (timelock contract) can call this selfSustainRate function every few weeks to ensure the contract never runs out of rewards.
This means that as volume on xTAO increases, holder APY rises as well as the rewards for farmers. All of this happens while the total supply of xTAO never goes above 25m.