FAQ
Frequently asked questions
What is usd+ and how it works? USD+ is the main token of the Overnight protocol, fully collateralized with assets that can be instantly converted into USDC. It's a rebase token that can experience Profit (positive rebase) when the collateral value exceeds 100% and Loss (negative rebase) when the collateral value falls below 100%. Profits are distributed to USD+ holders directly by increasing their wallet balance once a day.
What is rebase and how it works?
The rebase mechanism is triggered manually by the protocol and the entire process happens seamlessly within 6 steps that are as follows:
User uses USDC or BUSD to mint USD+ via Overnight’s dApp — BUSD is only applicable for minting USD+ on BSC
Overnight’s Smart Contracts devise a logic-automated investment methodology for Yield-Generating Strategies
The fees & rewards from step 2 (including inflationary rewards, swap fees, and lending fees earned) are swapped for USDC
New USD+ is minted from the earned USDC
The minted USD+ goes back into your wallet via a rebase mechanism.
A rebase mechanism is used to payout the yields earned from strategies. In doing so, the circulating supply expands and is financed by the USDC earned from the Yield-Farming strategies. The mechanism is similar to what’s employed by IB-Tokens (Interest Bearing) the likes of aUSDC from AAVE where your underlying token quantities grow passively proportionate to the lending fees earned. Smart contracts use the following methodology to determine a user’s rebase rewards: Rebase Rewards = User Holdings*Rebase Amount / Total Holdings = Rebase for the user for the said day
What is OVN token?
OVN token is a utility token that serves multiple purposes in the Overnight protocol. It is used for bribes to promote USD+ and incentivize conservative risk decisions, as well as for voting rights to establish decentralized risk monitoring and management processes.
The goal of issuing OVN is twofold:
1.Promote and popularize USD+, which is achieved with using OVN for bribes
2.Establish a robust & decentralized risk monitoring and management processes at the protocol level.
What is insurance?
Insurance in Overnight Finance is a mechanism where excess yield generated by strategies is accrued to the Insurance Vault. This yield is used to buy OVN tokens off the market and add to the vault. The rewards from insurance are automatically distributed in the form of OVN tokens. If the payout is positive, your balance should increase. However, keep in mind that it can also be negative on some days
What are bribes?
Bribes are a mechanism where anyone can select a Liquidity Provider (LP) to bribe on a Dex that allows it. The more a LP gets voted, the more rewards the LP holders get. In exchange, voters get part of the LP fees and the bribes.
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