What is the EMP Vault? #
The introduction of The Vault is an exciting development, as it allows our community to support on the ground developments, 100% in EMP and earn returns while they HODL their $EMP.
- V1: Collateral Support Vault – The Vault will lock up supply, which along with the demand for new project collateral will support the value of the $EMP used for collateral.
Set to launch April/May 2023
- V2: Developer Support Vault – EMP token holders will be able to support housing developers to meet their collateral obligations
Set to launch later in 2023
By using Empowa’s novel approach to collateralisation, which leverages our EMP token, we ensure our ability to scale across multiple countries while providing investors a liquid form of security.
Read the full announcement here
How does it work? #
This collateral model provides a new opportunity for EMP token holders, as they will now be able to support housing developers to meet their collateral obligations. We are therefore exploring different ways to enable this support, including the following:
- Locking some of the supply to enable us to capitalise our platform at current market prices to provide greater platform stability.
- Introducing an ecosystem-wide collateral pool (a Collateral Treasury) to minimise the impact of a single project default.
- In the future, create instruments that allow non-developer participation in the provision of collateral.
The mechanisms by which these collateral support features will be introduced to the Empowa ecosystem are actively being worked on and we will continue to provide updates as they progress.
The first of these mechanisms; to be introduced soon; will be Collateral Support Vault. The Vault will lock up supply, which along with the demand for new project collateral will support the value of EMP used for collateral. More details on this approach can be viewed in our blackpaper.
Read more about the blackpaper here
How are returns generated? #
Returns will be paid using a percentage of net income generated through the Empowa platform.
To allow The Vault to properly support the described collateral model, a sufficient number of projects need to be active within the Empowa ecosystem. Until this level of utilisation is achieved, a degree of risk exists for developers and project funders.
We therefore plan to initially supplement The Vault returns through the use of some of the Operating Fund token allocation, so that the protocol is also contributing to this early stage risk.
As more projects are funded and other collateral support mechanisms are introduced, more returns will be generated through platform net income, reducing (and eventually eliminating) the need to use the protocol owned risk allocation to contribute to The Vault returns.