Utility & Governance
- Governance — vote on risk parameters, caps, fees, and upgrades
- Fee sharing — stake to earn share of protocol revenue
- Insurance staking — earn yield by backstopping the reserve
- Liquidator boost — higher bonus for $VRLA stakers
Governance
VRLA holders can govern protocol parameters through on-chain voting.
What Can Be Governed
| Category | Parameters |
|---|---|
| Risk Parameters | Tier LTV values (80/65/50%), per-position LTV overrides, liquidation thresholds |
| Liquidation Config | Target health factor, bonus curve (min/max), protocol fee |
| Interest Rates | Optimal utilization, base rate, slope1, slope2 |
| Protocol Caps | Deposit cap, borrow cap (per chain) |
| Oracle Settings | Max staleness, liquidation grace period, early-closure window |
| Treasury | Grants, partnerships, ecosystem spending |
| Upgrades | Contract upgrades, new chain deployments, new collateral types |
What Cannot Be Governed (Hardcoded)
| Parameter | Value | Why |
|---|---|---|
| Reserve fee | 10% | Consistent first-loss coverage |
| Min borrow | 10 units | Dust prevention |
| Repay delay | 1 minute | Flash loan protection |
| Liquidation threshold | HF < 1.0 | Core safety invariant |
Voting Process
Proposal submission
Review period
Voting
Quorum check
Timelock
You can delegate your voting power to another address without transferring tokens. Delegation is revocable at any time.
Fee Sharing
Protocol revenue flows to $VRLA stakers.
Revenue Sources
| Source | Rate | Description |
|---|---|---|
| Liquidation protocol fees | Variable | Treasury revenue from liquidations |
| Reserve withdrawals | N/A | Governance can withdraw excess Pool reserve to Treasury |
Stake VRLA in the Varla Staking contract to receive a pro-rata share of Treasury-funded USDC/USDT distributions.
reserveBalance for bad-debt protection. Fee sharing is funded from the Treasury (primarily from liquidation protocol fees, and optionally from governance-approved reserve withdrawals).
| Distribution | Share |
|---|---|
| Stakers | 70% |
| Treasury | 20% |
| Insurance Fund top-up | 10% |
Payout: Weekly in USDC/USDT (matching the chain/platform's collateral token).
Insurance Staking
Backstop the protocol and earn additional yield. The protocol's on-chain first-loss coverage is the Pool's reserve balance (funded by 10% of borrower interest).
In v1, "insurance staking" is implemented as an additional rewards policy for stakers (funded by Treasury). True recapitalization via VRLA auctions/buybacks is a later phase.
| Metric | Value |
|---|---|
| Base APY | Same as Fee Sharing |
| Insurance Premium | +5–15% additional APY (Treasury-funded) |
| Slash Risk | Not automatic in v1 (future phase) |
| Cooldown | Same staking cooldown |
Liquidator Boost
VRLA stakers get preferential liquidation terms. Boosts are implemented as a rebate on the protocol fee (the Treasury's cut), based on your staked VRLA balance.
| Active Staked $VRLA | Protocol Fee Rebate |
|---|---|
| 0 | 0% |
| 1,000+ | 5% |
| 10,000+ | 10% |
| 100,000+ | 15% |
If the protocol fee for a liquidation is $100 and your rebate tier is 10%, the Treasury receives $90 and you effectively keep $10.