🏛️CHEDDA Lock Gauges

Chedda lock gauges control the emission of rewards to liquidity directors and LP stakers, and also serve as the final backstop in case of a shortfall event.

They also form part of the safety module which recapitalize a pool in case of a shortfall event.

Locking $CHEDDA

$CHEDDA tokens can be locked for fixed periods of time, ranging from 30 days to 360 days. Locking $CHEDDA to a gauge mints vCHEDDA. The amount of vCHEDDA minted is determined by the amount of $CHEDDA locked and the lock time. The lock time determines the boost factor, which is a multiplier applied to the amount of $CHEDDA locked to determine the vCHEDDA amount

The boost factors are set as:

Lock time
30 days	0.25x
90 days	1x
180 days	2x
360 days	4x

The amount of vCHEDDA minted is then defined as

$$v = CHEDDA amount * Boost factor / Max boost$$

Governance token minting process

Directing $CHEDDA Token Emission

$CHEDDA token rewards are released continuously according to the token emission rate. Emissions are distributed to all pools based on the amount of vCHEDDA attached to each pool. In effect, the $CHEDDA emission rewards a pool receives is a function of the amount of $CHEDDA locked to that pool and the length of time the tokens are locked.

Thus, pools with more $CHEDDA locked for longer periods of time receive more token emissions.

A portion of token emissions are distributed evenly to all pools. This ensures that smaller pools with less liquidity receive some rewards as well. This serves to incentivize a baseline of liquidity provision in all pools.

Shortfall Event Handling

In the normal operation of the protocol, positions that become insolvent due to a drop in the value of the collateral or accrued interest on the debt can be liquidated, with collateral sold to repay the debt.

In some cases, if under-collateralized positions are not liquidated in time, a vault can accrue bad debt. To rectify this, in case of a shortfall event, a portion of the $CHEDDA tokens locked to a gauge can be sold to recapitalize the pool. The amount of tokens slashed is capped by the value of bad debt and max slashing ratio of the gauge. The default max slashing ratio is 20%.