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Introduction to v1.1

Cat-in-a-Box version 1.1 is a spinoff of the original protocol.

Cat-in-a-Box v1.1 realigns incentives within the protocol. The original version incentivised depositors with boosted yield, where the extra yield came from collateral against which debt was taken in the system.

The new version is designed to incentivise borrowing and use the protocol to the best of its capabilities by taking advantage of the delayed selling mechanism introduced by Cat-in-a-Box.

Our aim is to have a healthy protocol that supports both borrowing and lending.

Boosted yield from CDP deposits favouring depositors leads to a system skewed towards heavy depositing and no borrowing. This makes taking on debt less appealing.

Please note: There is no migration involved between v1 and v1.1. Both will continue to be fully functional and protocol users may decide to use the version they deem best suited for their needs.

What’s different?

Boosted yield dynamics​

v1.1 Yield is dependent on your CDP health - maintaining riskier than average collateralised debt positions (CDPs) is rewarded with boosted yield. User CDPs that have higher loan-to-value debt than the protocol’s global average will receive higher than normal staking yield rates. You don’t receive a yield if you don’t have any debt.

v1 Yield is dependent on your CDP health - maintaining healthier than average collateralised debt positions (CDPs) is rewarded with boosted yield. User CDPs that have lower loan-to-value debt than the protocol’s global average will receive higher than normal staking yield rates.

Risk of being resolved​

As explained above ‘maintaining riskier than average collateralised debt positions (CDPs) is rewarded with boosted yield’. The consequence of a riskier position is that you’re more likely to be resolved.

Maintaining a safe debt position​

In order to avoid having your debt position resolved you should look to keep your LTV below the system average LTV. Those with LTV just below system LTV will receive the best yield whilst not motivating a resolving action against their debt position.

Minting fee​

v1: no fee upon taking on debt

v1.1: up to 0.5% minting fee upon taking on debt denominated in boxETH and added to your CDP’s debt.

boxFEE​

The protocol fee endpoints can be set to allow fees to be directed to a new boxFEE token contract in case of any future upgrades.