Key Concepts

iAssets

iAssets are reward-bearing assets minted on the Supra chain that act as voucher tokens representing a user’s ownership in the IntraLayer vaults. The name is derived from ‘IntraLayer Asset.’ Holders are envisioned to have two income streams: initially, iAsset holders can claim staking rewards generated by borrowed and delegated SUPRA, with assets submitted to the IntraLayer vaults serving as collateral. After the Dynamic Function Market Maker (DFMM) is released, we currently plan to ensure that iAsset holders also earn rewards generated from AMM fees.

Pre-minted iAssets

Minting is a two-step process. First, upon deposit, the asset is pre-minted to the user’s account. After a waiting period (two epochs), the user can mint the pre-minted assets. A pre-minted iAsset represents the user’s right to mint at a later time; it does not accrue rewards. Only fully minted iAssets generate rewards, so users must complete the mint to start earning.

Total borrowable amount

The total borrowable amount ( in SUPRA) is the cap set by governance: it is the maximum SUPRA placed in the PoEL vault that users can borrow. Each epoch, the protocol aggregates users’ collateral deposited into the IntraLayer vaults, converts it to SUPRA terms, and adjusts it by the collateralization rate. Based on this adjusted value, the system determines how much SUPRA to borrow and delegate. All borrowed SUPRA is directly delegated to the delegation pools, accruing staking rewards for iAsset holders.

Staking rewards, and therefore iAsset APYs, depend on the ratio of borrowed-and-delegated SUPRA to the collateral asset supply adjusted for the collateralisation rate.. If the total collateral value (in SUPRA terms, after adjusting for collateralization rates) is less than or equal to the total borrowable amount, the system targets delegating an equivalent amount of SUPRA (i.e., matching the adjusted collateral). If the total collateral value exceeds the total borrowable amount, the system caps borrowing/delegation at that total borrowable amount, which reduces the reward rate available to iAsset holders because additional collateral cannot be matched with additional delegated SUPRA.

This design keeps the total SUPRA available for borrowing and delegation predictable, aiming for the network’s fiscal sustainability and more resilient economic-security guarantees. System governance can raise or lower the total borrowable amount, thereby adjusting the maximum cap on SUPRA that can be borrowed and delegated

iAsset APY

In addition to the total borrowable amount, the rewards distributed to iAsset holders, and thus an asset’s APY, depend on the deviation between the asset’s current and target portfolio weights (which affects the collateralisation rate), the applied reward-reduction rate, and the asset’s desirability score.

Asset Weights: Target vs. Current

An asset’s target weight reflects the system’s target composition for the portfolio of assets submitted as collateral. Targeting a specific composition serves multiple objectives, including diversifying assets attracted to Supra’s DeFi ecosystem and reinforcing the network’s economic security.

The actual composition may deviate from the target because it depends on user deposits. To steer the portfolio back toward target, the system applies collateralisation rate that can dynamically adjust to incentivize deposits of a particular asset type. We refer the difference between of an asset target weight in the collateral portfolio and current weight as Composition Gap. Governance can parameterise this so that as the composition gap for an asset increases, the asset’s collateralisation rate increases, reducing its effective loan-to-value (LTV) and, in turn, affecting the asset’s APY.

We calculate the collateralisation rate for asset X as follows:

Here, pmin represents the minimum collateralization rate available in the system, while pImax and pIImax are the maximum collateralization rates for the asset, corresponding to the Second and intervals of the function, respectively. weX* represents target weights of asset X and wXe represents the weight of the asset in the collateral portfolio in e-th epoch.

Asset desirability score

An asset’s desirability score affects its APY relative to other assets. It is envisioned that those parameters become particularly relevant once the Dynamic Function Market Maker (DFMM) is live: IntraLayer vaults are intended to serve as DFMM liquidity pools, and we plan to configure desirability scores based on each pool’s capital efficiency so the system attracts higher-efficiency assets. For more detail, see the Proof of Efficient Liquidity (PoEL) paper.

Reward-Reduction Rate and Stimulation Rewards

The Multi-Asset Liquid Staking system is designed to bootstrap Supra’s DeFi ecosystem by attracting a diversified set of assets and promoting iAssets as a core asset class. To achieve this, the system also incentivises supplying iAssets to liquidity pools across DeFi use cases. For this purpose, it introduces two concepts: the Reward-Reduction Rate and Stimulation Rewards. The Reward-Reduction Rate (0–100%) reduces baseline rewards distributed to general iAsset holders, and the withheld portion is redirected to the Stimulation Rewards budget, which is envisioned to be used to incentivise depositing iAssets into liquidity pools of selected DeFi applications.