# Rewards Engine

Solomon generates rewards from funding rates via a basis trade with t-bill yields in the works

## Basis Trade

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

Solomon utilizes CEXes (eg. Binance) to create its basis trades. It places a neutral spot-long / perp-short across major tokens (eg. BTC, SOL, ETH) to capture perp funding and futures/spot basis rates. The auto-compounding structure ensures rewards are efficiently reinvested.

This is then distributed to stakers ([sUSDv](/usdv/usdv-and-susdv.md)) and permissioned USDv holders ([YaaS](/usdv/yaas.md)).

## Rewards Flow

1. Approved users mint [USDv](/usdv/usdv-and-susdv.md) by sending equivalent assets in exchange for the minted USDv.
2. These assets are then used to place positions via custody partners.
3. The rewards are then distributed to the staking contract regularly.<br>


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