Tranches FAQs

What happens in the case of a default (hack)?

In case of a hack, an emergency shutdown can be triggered (by both the guardian, which would be a multi-sig wallet, and the owner, which will be the Idle governance) in order to pause both deposits and redeems.
Read the Security Management Policy section to learn more about the guardian and owner addresses
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The redistribution of remaining funds can happen selectively, by allowing only Senior tranche holders to withdraw first directly in the main contract, or through a separate contract for more complex cases and resolutions (managed by the Idle governance).

Is there a locking period?

There are no locking periods or epochs and users are free to enter and exit at any time. The interest earned (and governance tokens, after being partially sold in the market) will be split between the two classes according to a predefined ratio called trancheAPRSplitRatio (e.g. 10% interest to Senior tranche holders and 90% to Junior tranche).
Hence, the rate is variable for both classes of tranches.

How is the APY determined?

The base APY, before being split between tranches, is provided by the underlying strategy that takes into account the reinvestment of the accrued governance tokens (except for eventual IDLE rewards). The actual APY of each tranche class is determined by the ratio between the current underlying TVL of Senior and Junior tranches (ie APY = share of yield allocated to senior tranches / Senior TVL). The APY has to be considered net of fees.
For more info view the readme.

How are fees collected?

Fees are collected at each harvest event. When the strategy auto-reinvest accrued tokens, the Idle protocol charges a 10% performance fee. Revenues get routed to the FeeCollector address.

What are staking rewards?

To keep a good ratio between Senior and Junior tranches and a healthy APY, part of farmed governance tokens (e.g. IDLE) are redistributed to users who stake their tranche tokens in specific tranche rewards contracts.
Last modified 1mo ago