Core Product Mechanism

Cicada Protocol (LT-RT Rebalance Mechanism)

The Cicada Protocol is an advanced system designed to dynamically optimize the balance between Liquidity Tokens (LT) and Rebase Tokens (RT). By channeling real yield assets into the cryptocurrency market, it fosters a sustainable ecosystem underpinned by verifiable revenue streams.

• RT (Rebase Token): A token designed to provide holders with agreed-upon dividend distributions based on liquidity income.

• LT (Liquidity Token): A tradable token representing ownership of underlying Real-World Assets (RWAs).

Key Algorithms and Formulas

RT-LT Conversion Mechanism

The protocol enables seamless, 1:1 conversion between RT and LT, facilitated by smart contracts. This automated process ensures transparency, efficiency, and user accessibility.

RT Yield Distribution

Yields for RT holders are determined based on the actual returns generated by the underlying RWAs. The distribution formula is as follows:

LT Token Issuance and Locking Mechanism

The issuance of new LT tokens is governed by the protocol's net revenue and the prevailing market price of LT. The calculation for new LT token issuance is defined by the following formula:

Asset Rebalancing Mechanism

The LT-RT Rebalancing Mechanism dynamically adjusts the allocation ratio between LT and RT assets in response to prevailing market conditions, enabling users to optimize their portfolio composition. The rebalancing formula is as follows:

Compounded Yield Mechanism

The protocol utilizes an automated compounding system to optimize and enhance returns for stakeholders over time. The formula governing compounded returns is as follows: