# Pre-deposit Vault - Reward Mechanics

The Pre-deposit Vault earns rewards by acting as a **Token Provider** once the Token Pool and StakeBase contracts go live. Until then, eATH holders will not accrue any rewards. After activation, staking yield is determined dynamically based on how much of the Vault’s ATH is borrowed by Cloud Hosts.

***

### **1. Reward Activation**

* **Start Date**: After protocol activation
* **Eligibility**: Must hold eATH in your wallet
* **Claiming**: Manual (users need to harvest rewards via the dashboard)
* **Compounding**: Not automatic — to compound, users must claim and re-deposit

***

### **2. Reward Formula**

Once activated, rewards for eATH holders follow a **utilization-based share model**:

**Utilization (U) is defined as:**

```mathml
U=TotalATHlenttoCloudHosts/TotalATHdepositedbyTokenProviders
```

Users earn a proportional share of the rewards generated by Cloud Hosts who borrow ATH from the Vault. The more eATH you hold, the larger your share of the total rewards.

**Note:** The total rewards available to the Vault depend on how much of its ATH is actively borrowed and used by Cloud Hosts. These parameters are set and updated by the Aethir Foundation.

### **3. Dynamic Reward-Share Curve**

Rewards scale depending on how much of the Vault is in use:

**A. If Utilization ≤ Target (default: 70%):**

`If U ≤ U_target:RewardShareRate(U) = BaseShare \div (U ÷ U_target × Slope1)`

**B. If Utilization > Target**

 `If U > U_target: RewardShareRate(U) = BaseShare + Slope1 + ((U – U_target) ÷ (1 – U_target) × Slope2)` 

This means:

* If demand for staked ATH is low, rewards are reduced
* If demand exceeds target utilization (e.g., 70%+), additional yield is unlocked
* Target Rates are set by the Aethir Foundation to ensure fair and sustainable yield distribution across the ecosystem.

<figure><img src="/files/JDLL9RZL1H92fYF5IFvQ" alt=""><figcaption></figcaption></figure>

The chart illustrates how staking rewards increase dynamically with utilization, offering higher yields as more ATH from the vault is borrowed by Cloud Hosts.

### **Reward Distribution Logic**

* **Proportional Rewards**: Your yield is based on your share of total eATH supply
* **Daily Settlement**: Rewards are calculated and updated every 24 hours (UTC+12)
* **No rewards accrue before vault activation**, even if eATH is held
* The Reward Share Limit Utilization rate is set at 85%, which means the protocol reaches its **maximum reward share rate (30%)** when the Token Pool utilization hits **85%**.

| **Utlization** | **Reward Impact**                   |
| -------------- | ----------------------------------- |
| 70%            | Optimal - full base reward captured |
| 75%            | Bonus Yield - Slope2 curve active   |

***

#### Summary

| **Mechanism** | **Details**                      |
| ------------- | -------------------------------- |
| Reward Token  | ATH                              |
| Eligibility   | must hold eATH                   |
| Claiming      | Manual (Via Dashboard)           |
| Vesting       | 30 days after withdrawal request |

###


---

# Agent Instructions: Querying This Documentation

If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question.

Perform an HTTP GET request on the current page URL with the `ask` query parameter:

```
GET https://docs.aethir.com/aethir-staking/predeposit-rewards.md?ask=<question>
```

The question should be specific, self-contained, and written in natural language.
The response will contain a direct answer to the question and relevant excerpts and sources from the documentation.

Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.