Referral rewards

Frontend interfaces, third-party contracts and other integrators of Grace protocol contracts may opt to earn a referral reward equal to 10% of all interest generated by their referred borrowers.

The referral reward is autonomously accrued to referrers by the protocol in order to incentivize frontend diversity and decentralization as well as long-term alignment with independent integrators.

Borrowers are never charged an extra fee or charged higher interest in order to cover referral rewards.

Grace contracts source code will be open sourced and documented soon. This page will be updated with references to full code documentation and live contract addresses as soon as they become available.

Referring borrowers

Referral rewards are only accrued when referring users who call the following borrow function on any Grace pool contract:

function borrow(uint256 amount, address referrer) external;

where

• amount is the raw amount of tokens to be borrowed by the user, and

• referrer is the address of the third-party which will accrue the referral reward

Each borrower is only connected to one active referrer per pool contract. If a borrower had already borrowed from the same pool via another referrer, the previous referrer will be replaced by the new referrer address on the next borrow call. The new referrer will start accruing referral rewards taking into account the borrower's existing and new debt in the pool.

The previous referrer will no longer accrue rewards from this borrower in this pool, but may continue earning rewards for referring the borrower to other pools.

This mechanism incentivizes referrers to acquire new borrowers for the protocol but to also maintain the loyalty of referred borrowers over time or risk them switching to other referrers.

Claiming referrer rewards

Referrers may claim all accrued rewards in each pool by calling the following pool function:

function claimReferralRewards() external;

The caller will receive their referrer rewards, if any, in the form of pool receipt tokens. They can later redeem the receipt tokens for the underlying tokens by calling withdraw or redeem functions on each pool contract.

Use cases

Third-party interfaces

Frontend interface developers who provide access to Grace protocol contracts can take advantage of referral rewards as a continuous revenue stream. Developers can grow their share of borrower referrals by providing borrowers with improved UI features and experience.

Leveraged yield protocols

Developers may build leveraged yield protocols on top of Grace by depositing user collateral and borrowing tokens to generate yield to the user via external yield opportunities. By taking advantage of referral rewards, developers can generate revenue for their protocol without adding extra costs to the end user.

Borrow aggregators

Borrow aggregator services that allow borrowers to search for the best loan terms across lending protocols can take advantage of referral rewards as a revenue stream when referring borrowers to Grace.

Wallet developers

Mobile, desktop and browser wallet developers can use Grace under the hood to provide loans to their users without charging them extra costs while earning referral rewards from the protocol.