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How Azuro Works
Rewards Distribution

Reward Distribution

The term "reward" within Azuro protocol refers to the fee of the Pool's (opens in a new tab) profit that is distributed to those who contribute to its operation.

Currently, there are 4 types of contributors in the Pool, each entitled to rewards from protocol revenue: Liquidity Providers (LPs), Data Providers, Apps, and AzuroDAO.

Note that reward split percentages aren't set in stone, and may be subject to further changes if deemed necessary by AzuroDAO.

LPs and Data Providers

For LPs and Data Providers, after the completion of each Condition, the profit or loss of the pool is multiplied by the reward rate (20% and 10% respectively) and added to the contributor reward balance.

Apps (Frontends)

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Visit this (opens in a new tab) Dune query to view the historical month-by-month of our apps' reward calculation.

Apps' reward is paid monthly, separately for each chain. Each app's final take-home reward will be the lower of its NotionalReward and the sum of its SpreadRewardCap for that month.

SpreadRewardCap (SRCt)

SRCb=50%×Spread×BetSizeSRCt=SRCb1+SRCb2+...+SRCbiwhereSRC denotes SpreadRewardCap,SRCb represents the SpreadRewardCap for an individual bet,SRCt represents the sum of SRCb over a month’s period,andSpread is the vig (aka margin) for an individual bet,BetSize is the amount (aka wager size) of an individual bet.\begin{array}{c} \textit{SRCb} = 50\% \times \textit{Spread} \times \textit{BetSize} \\ \textit{SRCt} = \textit{SRCb1} + \textit{SRCb2} + ... + \textit{SRCbi} \\ \\ \\ \text{where} \\ \textit{SRC} \text{ denotes } \textit{SpreadRewardCap}, \\ \textit{SRCb} \text{ represents the } \textit{SpreadRewardCap} \text{ for an individual bet}, \\ \textit{SRCt} \text{ represents the sum of } \textit{SRCb} \text{ over a month's period}, \\ \\ \text{and} \\ \textit{Spread} \text{ is the vig (aka margin) for an individual bet,} \\ \textit{BetSize} \text{ is the amount (aka wager size) of an individual bet.} \end{array}

RevenueReward

RevenueReward=70%×AppRevenuewhereAppRevenue is the protocol revenue that is attributed to a particular app,RevenueReward is the notional reward for a particular app before applying SRCt.\begin{array}{c} \textit{RevenueReward} = 70\% \times \textit{AppRevenue} \\ \\ \\ \text{where} \\ \textit{AppRevenue} \text{ is the protocol revenue that is attributed to a particular app}, \\ \textit{RevenueReward} \text{ is the notional reward for a particular app before applying } \textit{SRCt}. \end{array}

DAO

The remaining amount will be attributable to AzuroDAO, calculated by deducting all other rewards from the total monthly Pool Revenue.

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LP, Data Provider, and DAO rewards can happen to be negative in the event of Pool losses (caused by bettor outperformance). However, App rewards can be only positive or zero.

Data ProvidersBetting Engines