Allocation
How Compost allocates capital across markets.
How Capital Is Allocated
Compost allocates capital through three channels:
1. Validator Staking (20-30% of vault)
| Aspect | Detail |
|---|---|
| Purpose | Liquidity buffer for redemptions |
| Yield | ~2.5% APY base |
| Queue | 7-day unstake |
Provides consistent base yield while maintaining liquidity.
2. Partner Allocations (50-70% of vault)
Direct arrangements with HIP-3 deployers.
| Aspect | Detail |
|---|---|
| Fee share | Typically 20-40% of trading fees |
| Terms | Vary by partner and allocation size |
| Advantage | Compost's scale enables better terms than retail |
Current Partners: TBC
3. Direct Deployment (0% initially)
Compost deploys its own HIP-3 market.
| Aspect | Detail |
|---|---|
| Fee share | 50% (protocol-enforced) |
| Requirement | 500K HYPE minimum + operator responsibility |
| Status | Under evaluation for Phase 2+ |
Future consideration once scale and operations justify the capital commitment.
Allocation Summary
| Channel | % of Vault | Fee Share | Status |
|---|---|---|---|
| Validator staking | 20-30% | ~2.5% APY | Active |
| Partner allocations | 50-70% | 20-40% | Active |
| Direct deployment | 0% | 50% | Phase 2+ |
Selection Criteria
Before allocating to any partner, we assess:
Operator
- Team background and track record
- Previous projects and on-chain history
- Communication and transparency
- Responsiveness to issues
Market
- Volume history and trajectory
- Fee generation (actual, not projected)
- Oracle quality and update frequency
- Leverage limits and risk parameters
- Slashing history
Fit
- Correlation with existing allocations
- Category diversification
- Liquidity profile
Governance
Allocation decisions are made by the Compost team with oversight from an independent advisory committee.
| Aspect | Detail |
|---|---|
| Decision maker | Compost team |
| Oversight | Independent advisory committee |
| Transparency | All allocations and terms published |
Current Allocations
WARNING
Allocations will be published on launch and updated regularly.
| Market | Category | Allocation % | Method |
|---|---|---|---|
| TBC | TBC | TBC | TBC |
Limits
| Constraint | Limit |
|---|---|
| Single market | Max 25% of vault |
| Single operator | Max 40% of vault |
| Unproven markets | Partner allocation only |
INFO
Next: Fees