Understanding 4Belt
4Belt is available on BSC and HECO Chain. This is a short guide to understand the basics of the 4Belt BLP pool and the 4Belt Token.
The 4Belt BLP Pool is at its basis, a liquidity pool. Liquidity pools are pools of tokens that sit in smart contracts. You can learn more about liquidity pools here.
4Belt is a pool that consists of beltTokens ((BSC: beltBUSD, beltUSDC, beltDAI, beltUSDT) (HECO Chain: beltHUSD, beltUSDC, beltDAI, beltUSDT)).
The 4Belt BLP token is a share token of this pool. beltTokens are the multiple strategy tokens that consist of beltSingleToken with beltStrategy for each protocol. We created this architecture for the scalability of the beltToken. This architecture makes it possible to add or upgrade the strategies to get better APR to users. We also set up an idle ratio between strategies to handle larger volumes of assets and prepare for strategies that are temporarily pending.
We aim to make 4Belt the best option to keep your stablecoin position while getting the best reliable yield possible. Understanding 4Belt and beltTokens is straightforward. Simply, it is the base value of the token + increasing value from the yield when you hold the token.
4Belt is created through stableswaps so it has some characteristics of that system. First, you can see the details for the breakdown of tokens in this pool, and you can take advantage of this when depositing or withdrawing.
This screenshot is the breakdown of the BSC 4Belt BLP Pool. The amount of DAI is proportionally low which means that you can deposit ("sell") it for slightly more 4Belt tokens than others with a higher amount (e.g. BUSD). The idea behind this is that traders/depositors are incentivized to push the price back to keep a certain ratio of the quantity of these tokens.
What happens when you provide liquidity to the 4Belt Pool?
You have the option of depositing one or more stablecoins.
If you deposit one stablecoin, it goes to the token/strategy that is selected for the idle ratio. So if you deposit DAI in the BSC 4Belt pool, it would get send as one of DAI, USDC, USDT, or BUSD to the particular strategy. The values (token and strategy) change constantly as people trade between different tokens and the ratio of the pool changes.
Does it matter which coin I deposit?
You can deposit one or all the coins into the pool without it affecting your returns. Your tokens will get split into the pool and this doesn't affect the returns you get at all. However, there is a deposit bonus/penalty system in that affects the value of your initial principal deposit.
Deposit Bonuses
You can see above in screenshot A, that the ratio of DAI in the pool is relatively low. If your plan was to join the pool at that time, you would ideally deposit DAI into it. This would give you a slight "bonus" compared to other tokens with a higher ratio in the pool.
There are two main reasons for this:
One main reason is that the pool is always trying to balance itself out and go to equal parts (i.e. 25% of each token), so depositing the token with the lowest ratio will get you a deposit bonus.
Another reason is that stablecoins also have value fluctuations. If a certain token is slightly more expensive there is a bonus for depositing it.
As you can see below, depositing 1000 DAI gives you slightly more 4BELT BLP than depositing 1000 BUSD. Pay attention to the number of 4BELT BLP received and the bonus.
Withdrawal Bonuses
When you withdraw, the same principle applies (but reversed). Withdrawing the stablecoin with the highest ratio gives you a bonus. You can, however, choose whatever stablecoin (1) or combination of stablecoins (2-4) you want to withdraw.
Calculating Bonuses
The bonus is calculated as such:
Understanding 4Belt APR
For the 4Belt BLP pool, APR is calculated through a combination of the 4Belt APR(Base APR from multi-strategy yield from our strategy protocols), Trading Fee APR (this is a 24 hour average), and BELT token rewards.
The breakdown can be seen at anytime by clicking the magnifying glass icon next to the 4Belt pool on the Belt Finance Website.
At the time of writing, the 4Belt BLP Rewards are as such:
As you can see in the screenshot, the Total APR is a combination of the aforementioned 4Belt APR, Trading Fee APR, and BELT APR.
As you get rewards for your deposit in the 4Belt Pool, the number of your tokens will not go up but the value of each 4Belt BLP token will go up with the 4Belt APR and Trading Fee APR. *
The 4Belt APR is autocompounded to the value of your 4Belt BLP tokens every 6 hours.
The Trading Fee APR is autocompounded to the value of your 4Belt BLP tokens with each trading transaction.
BELT APR rewards are added in real time and can be seen in the "BELT EARNED" section separately. These can be harvested at anytime.
*Take note that some autocompounding platforms utilizing Belt Finance vaults only calculate the BELT APR rewards. This is not the true, total return. The total return must also include the increasing value of the 4Belt BLP token itself.
The Value of the 4Belt Token
The 4Belt token is represents the average of the underlying tokens (stablecoins) + the yield from our multi-strategy yield and trading fees thus far.
As more yield gets applied with the passing of more time and with more strategy protocols giving higher yield, the value of the 4Belt token will continously increase as this yield is autocompounded every 6 hours.
Below is the equation we used to calculate 4Belt price:
Earn Policy
A main function of Belt.fi is being a lending aggregator. Funds are automatically shifted between strategy protocols as interest rates change between these protocols. Belt.fi completely optimizes the interest accrual process for end-users to ensure they are always obtaining the highest interest rates among our connected platforms. Earns from each beltStrategy contract are automatically added and compounded to your deposit every 6 hours.
example transaction
https://bscscan.com/tx/0x6e8389aef0451c2c3907930f591ab6c586debb5e4a46f17ac7dd9a457384b8d3
All the contracts address we deployed can be seen here: ( https://docs.belt.fi/contracts/contract-deployed-info ) and all the contracts we deployed are verified on BSCSCAN.
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