An Overview of MILK Vaults
Stepping onto the stage in the DeFi arena is a pioneering feature called MILK Vaults. This concept allows MuesliSwap users to engage in a novel mechanism where they can lock their MILK tokens for a fixed period of time. Users that commit their MILK tokens will be rewarded with additional MILK after the locking period has passed.
The key element here is commitment. MILK Vaults are designed for users who intend to navigate the longer trajectories in the DeFi ecosystem and want to vest their tokens for the project as a sign of commitment.
How do MILK Vaults work?
Users participating in the MILK Vaults initiative can lock their MILK tokens using a non-custodial smart contract. This contract ensures that the tokens are secure and will only be released once the locking period ends. The beauty of this non-custodial contract is that user-funds are entirely safe and can not be withdrawn by anyone than the user after the locking time.
Once the locking period ends, users will receive their initial MILK tokens along with the MILK rewards they have accumulated over time. It’s important to again point out that neither the rewards nor the locked MILK is distributed until the locking period ends.
Users can lock their MILK between 26 and 70 weeks. The longer the locking period, the higher the annual percentage rate (APR) reward, offering a compelling incentive for users to commit to the platform long-term. The APR for the locked MILK tokens varies between 8 and 20 percent.
Am I exposed to impermanent loss by participating?
No. Because the MILK is locked and liquidity pools are not involved, users are not exposed to impermanent loss throughout the staking period.
Will there be any downside regarding the utility of my MILK?
No. The locked MILK tokens remain eligible to participate in community governance. If the community decides to introduce new utilities for MILK tokens in the future, the locked MILK tokens will be eligible for these as well.
Sustainability: A Core Principle
The MILK Vaults mechanism has been designed to keep sustainability at the core. The additional MILK tokens are not sourced from the previously announced community treasury, ensuring that resources for long-term development are preserved. Instead, these tokens are allocated from a separate pool, specifically set aside for early holders and team members.
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