iAUSD Yield Calculation

The yield generated from staked collateral is used to provide returns for iAUSD holders. This section explains the yield distribution process.

In Solana, staking yield is calculated and distributed every epoch— every 432,000 blocks, or ~48 hours. These rewards, denominated in SOL, are collected by the iASOL staking pool. For every iA Borrow position that minted iAUSD, a portion of these rewards is converted to iAUSD at the market rate. The proceeds are then allocated proportionally to iAUSD token holders. As a rebasing token, iAUSD increases in quantity for holders rather than altering its pegged value of $1.

Yield Distribution Mechanism

With a minimum 150% collateralization ratio, each $1 of iAUSD is backed by at least $1.5 of iASOL collateral, creating $2.5 of total economic value (iAUSD + iASOL) per $1 of iAUSD. The yield from the iASOL collateral is distributed proportionally across this total value.

The iAUSD holder earns a share of the yield equal to $1/$2.5, reflecting the ratio of their iAUSD to the total economic value

$$Yield (iAUSD) = \frac{Value(iAUSD)}{ Value (iAUSD) + Value (iASOL)}$$

The iASOL depositor (position creator) earns a share equal to $2/$2.5, based on their collateral’s contribution:

$$Yield (iASOL) = \frac{Value(iASOL)}{ Value (iAUSD) + Value (iASOL)}$$

With a 150% over-collateralization ratio, iAUSD holders receive up to 40% of the SOL staking yield, while collateral depositors retain at least 60% of the yield.