Additional Rewards Management

Some DeFi protocols deploy incentives programs (like governance tokens distributions, airdrops etc.) for users depositing into their pools.

In the case of Kiln DeFi, user positions are aggregated on a Vault contract and then deposited to the underlying protocol, which makes the Vault be seen as one user by the underlying protocols.

Kiln DeFi is offering multiple additional rewards distribution models:

1. Claim; Allowing Kiln partners to claim all additional rewards received by their vaults, allowing partners to keep it from them or to redistribute it to users via protocols like Merkl.

2. Reinvest; Allowing Kiln partners to trigger a swap from the reward asset eg. COMP to the vault asset eg. USDC, it will boost the APY of the users you can do this a the frequency you prefer.

3. Direct user claim; Only available with Morpho, where are have a custom partnership so that users can directly claim morpho tokens.

Note that integrator is not obliged to process these additional-rewards, they can let them accrue on the vault which won't impact its normal behavior.

Here is a list of the protocol distributing additional rewards on top of the base rewards of lending assets.

Protocol	Additional rewards	Kiln DeFi distribution	Estimated Additional Rewards
AAVE v3	AAVE + more tokens, depending on the strategy	Claim Reinvest Direct user claiming	AAVE emissions are currently paused - 0% Additional token rewards from lending specific assets can be seen on the Aave "Markets" page.
Compound v3	COMP	Claim Reinvest	Between 0.5% and 10% depending on the chain, see all here.
Morpho	MORPHO + more tokens, depending on the strategy	Claim Reinvest Direct user claiming	Between 1% and 2% depending on the selected strategy, see all here.
Euler	EUL + more tokens, depending on the strategy	Claim Reinvest Direct user claiming	Between 1% and 2% depending on the selected strategy.
Venus	XVS	Not possible as require staking XVS.	Between 10% and 15% depending on the chain, see all here.
Kinetic	rFLR	Claim	Between 1% and 45%, see all here.
Fluid	FLUID	Not currently possible to claim or reinvest FLUID additional rewards	Between 2-3%, see here

Detailed flow for each additional rewards distribution models

Claim and Reinvest (or none) must be specified in the Vault at its initialization in the deployment parameters.

1. Claim: integrator can trigger the claim of the extra-rewards which will make an ERC-20 transfer from the vault to the address specified in the claim transaction. This is useful if you want to redistribute this revenue to the users yourself or with a solution like Merkl. Please contact Kiln team if you are interested in this option.

Hypothetical scenario where vault receives AAVE extra-rewards and integrator applies the CLAIM strategy.

1. Reinvest: Kiln DeFi automatically claim and reinvest the ERC-20 additional-rewards to the Vault asset (ex: USDC for a USDC AAVE v3 vault) which will create a rewards bump for all users. This is very useful to not expose users to other tokens than the one they deposited, creating a simple and aggregated experience.

   1. Rewards reinvestment is automatically performed by the Vault every Monday at 02:00 PM CET.

   2. We can't track the share of additional rewards in the rewards received by the users yet we will be able to see the bump every monday on the historical rewards via API.

Hypothetical scenario where vault receives AAVE extra-rewards and integrator applies the REINVEST strategy.

1. Direct user Claim: Direct user claim is only available with Aave, Morpho Euler, and is not managed by the vault itself but by the Merkl team. No action will be required on your end, Kiln is providing APIs to display theses rewards and know how much can be claimed by your users.

   1. Note that rewards can be distirbuted in MORPHO,AAVE, EUL token but also any other type of assets, all available additional rewards assets can be claimed in one transaction per chain by the user, you need to plan to add this in your UI if you are not using Kiln Widget.