Rewards
Understand how rewards like Emissions, External Rewards, and Rebase work in the Thirdfy ecosystem and who earns them.
Quick Start (TL;DR)
Rewards in 30 seconds: Stake xTFY = Rebase rewards (from protocol revenue + exit penalties) • Stake + Vote = Rebases + Voting incentives • Stake + LP + Vote = Everything (rebases + emissions + LP incentives + voting incentives) • Or mint o33 for AI-automated reward optimization
Thirdfy offers several ways to earn rewards by participating in the ecosystem. IMPORTANT: Staked xTFY is required to earn rebase rewards and to vote (and earn voter incentives). LP emissions are earned by liquidity providers in pools that receive emissions—staking is not required to claim emissions. Different activities grant you access to different reward streams:
AI Automation Available: Our AI agents can help optimize your reward strategies. From automated voting to position management, experience DeFi on Auto Mode by exploring our AI Agents.
Critical Note: Stake xTFY to unlock governance, weekly rebase rewards, and voter incentives. LP emissions accrue to liquidity providers in pools that receive emissions; staking xTFY lets you help direct those emissions and typically maximizes your total rewards when combined with providing liquidity.
Here's how rewards work:
1. Emissions (xTFY Tokens)
These are new xTFY tokens distributed weekly to incentivize participation in the ecosystem.
Current Reward Scope: Automated Pools
Currently, xTFY Emissions and the gauge voting system are primarily focused on automated liquidity pools managed by our partner, Ichi. For these pools, the protocol calculates your emission rewards based on your share of the pool and how long you provided liquidity during each weekly epoch.
You can also create manual concentrated liquidity (CL) positions and earn trading fees directly from swaps. However, at this time, manual positions do not receive xTFY emissions, nor can they be used with the automated o33 strategy.
Future Evolution: The emissions mechanism may evolve based on community governance and protocol needs. Changes to emission tokens, distribution methods, or reward structures would be implemented through community proposals and voting.
Who Directs Emissions?
xTFY stakers (including the o33 vault) vote weekly to decide which liquidity pools (gauges) receive these emissions.
Who Earns Emissions?
Liquidity Providers (LPs) in the chosen pools earn emissions based on their share and how long they provide liquidity. Voting directs emissions, but only LPs claim them. Staking xTFY is not required to claim these emissions; it is required to vote to direct them.
2. External Rewards (Permissionless Incentives)
Anyone—protocols, teams, or individuals—can permissionlessly add extra token rewards to incentivize specific actions within Thirdfy. There are two main types:
LP Incentives
External tokens added directly to a liquidity pool (gauge). These rewards are distributed to Liquidity Providers (LPs) in that specific pool, based on their share and time providing liquidity. LP incentives can be in any token (TFY, xTFY, or any other token) since they are permissionless—anyone can add incentives.
Voting Incentives (Bribes)
External tokens offered to encourage votes for a specific liquidity pool. These rewards (bribes) are distributed to xTFY stakers (including the o33 vault) who vote for that pool, proportional to their voting power. Bribes can be in any token (TFY, xTFY, USDC, or any other token) since they are permissionless incentives added by anyone—not protocol emissions.
3. Rebase Rewards (from Protocol Revenue & Exit Penalties)
Rebase rewards are weekly distributions to staked xTFY holders, funded by two sources:
Primary Source: Protocol Revenue The community governs how protocol revenue is distributed through our Revenue Governance system. Revenue comes from:
- AI agent service fees
- Trading fees from the concentrated liquidity AMM
- Vault management fees from our Ichi partnership
- Future cross-chain and DeFi product revenue
Each week, xTFY holders vote to decide what percentage of this revenue becomes rebase rewards (distributed to stakers) versus token burns (deflation).
Secondary Boost: Exit Penalties When users exit xTFY instantly, they pay a 50% penalty. These penalties enhance the rebase rewards, providing additional value to loyal stakers.
Community Control Unlike fixed tokenomics, xTFY holders collectively decide the optimal balance between rewarding stakers (rebases) and creating scarcity (burns) based on market conditions and community preferences.
Direct xTFY Stakers
Earn rebase rewards directly each week, proportional to their staked xTFY balance. Requires staking xTFY to participate in the reward distribution.
o33 Holders
Benefit indirectly. The o33 vault claims its share of protocol revenue rebases, exit penalties, and voting incentives, then auto-compounds everything back into the vault, increasing the o33:xTFY ratio over time.
Choose Your Reward Strategy
Active Strategy
Stake xTFY + Vote + Provide Liquidity → Maximum rewards: rebases + emissions + voting incentives + LP incentives.
Passive Strategy
Mint o33 → AI-automated compounding of all rewards. Set it and forget it while intelligent systems optimize everything.
Learn More
What's Next?
Ready to start earning rewards? Choose your path: