Early Redemption Fee

2024-11-14

The fee is calculated based on the portion of the total deposit that can be withdrawn during the convertible bond’s maturity period.

It’s important to note that this calculation assumes users can withdraw only 10% of their deposit before the bond reaches its maturity date.

Why is only 10% available for immediate withdrawal?

Most platforms do not allow withdrawals during the locked staking period because the staked funds are used to generate interest income. However, Gyrowin recognizes that users may need access to emergency funds, so it allows withdrawals of up to 10% of the staked amount even during the staking period.

The 10% withdrawal limit for staked assets is a strategic safety feature that ensures protocol stability and protects all stakers. Here's why:

Protection Against Mass Unstaking:

• Prevents sudden large-scale withdrawals that could destabilize staking rewards

• Maintains consistent reward distribution for all stakers

• Protects the protocol's ability to generate sustainable yields

Emergency Response Capability:

• Provides buffer funds if emergency migration is needed

Staker Security:

• Ensures fair distribution of withdrawal opportunities

• Protects smaller stakers from being impacted by large stakers' actions

• Maintains stable APY rates by preventing sudden TVL fluctuations

This conservative approach helps maintain a healthy staking ecosystem while balancing accessibility with security for all participants.

How is the early redemption fee calculated?

D: Deposited amount by the individual

T: Total deposit amount (sum of all deposits)

𝑅: Base fee rate (percentage or fraction of the amount)

t: Time elapsed since deposit start

Td: Total deposit period (maturity period)

W: Amount that can be withdrawn by the individual (calculated based on the individual's deposit and total withdrawable amount)

Wtotal: Total withdrawable amount 10% of the total deposit amount)

1. Total Withdrawable Amount:

$$Wtotal = 0.10 * T$$

1. Individual's Proportion of the Total Withdrawable Amount:

$$W = (D/T) * Wtotal = {\frac D T} * 0.10 * T = 0.10 * D$$

1. Base Fee

$$F base$$

1. Proportional Fee Adjustment