# Conditional Release

### <mark style="color:blue;">Understanding the concept</mark> <a href="#undefined" id="undefined"></a>

Conditional Release is a KLEVA Token Reward Calculation Method based on the Lending Pool's Utilization Ratio of the previous day and the day before that. By using this logic, KLEVA Token Rewards for Lending Pools with a decreasing Utilization Ratio will decline.

However, regardless of the decrease in UR, all Lending Pools are designed to maintain the minimum of 70% of its designated KLEVA Token Rewards. This is a necessary safety measure as external environments can temporarily not allow Farmers from borrowing their preferred assets. Examples may be at times such as bear cryptocurrency market. On the other hand, when Utilization Ratio increases, Lending Pools can expect to earn the full amount of its designated KLEVA Token Rewards.

Conditional Release rewards Lending Pools that are strongly contributing to the growth of KLEVA Protocol, while simultaneously encouraging low performing Lending Pools to increase their Utilization Ratio. In the case of Lending Pools that are contributing to the growth of KLEVA Protocol, Stakers can expect to receive the full amount of KLEVA Token Rewards and a fair amount of Lending Interests.

In the case of low performing Lending Pools, KLEVA Token Rewards and Lending Interests would not be as charming as the former case. In such a scenario, Conditional Release will trigger Lenders to withdraw their asset, which results in a decreased pool size and a higher Utilization Ratio. This directly leads to a increase in profit for Stakers.

Utilization Ratio of all Lending Pools will be recorded at 9AM(SGT) sharp.

### <mark style="color:blue;">Important Notice</mark> <a href="#undefined-1" id="undefined-1"></a>

1. **KLEVA Token Reward Ratio**
   * Minimum : 70% (of designated KLEVA Token Rewards)
   * Maximum : 100% (of designated KLEVA Token Rewards)
2. **Snapshot**
   * 09 : 00 (SGT)

### <mark style="color:blue;">Example</mark> <a href="#undefined-2" id="undefined-2"></a>

Assumption : Daily KLEVA Token Rewards for KLAY Lending Pool : 30,000

1. UR of D-2 > UR of D-1 (Slight Decrease)
   * KLAY Lending Pool UR D-2 : 50%
   * KLAY Lending Pool UR D-1 : 45%
   * KLAY Lending Pool KLEVA Token Reward Ratio of D-day =\
     30,000 x 45/50 = 27,000 KLEVA<br>
2. UR of D-2 > UR of D-1 (Major Decrease)
   * KLAY Lending Pool UR D-2 : 50%
   * KLAY Lending Pool UR D-1 : 10%
   * KLAY Lending Pool KLEVA Token Reward Ratio of D-day =\
     30,000 x 70% = 21,000 KLEVA
3. UR of D-2 < UR of D-1 (Increase)
   * KLAY Lending Pool UR D-2 : 50%
   * KLAY Lending Pool UR D-1 : 60%
   * KLAY Lending Pool KLEVA Token Reward Ratio of D-day = 30,000 KLEVA<br>
4. UR of D-2 = UR of D-1
   * KLAY Lending Pool UR D-2 : 50%
   * KLAY Lending Pool UR D-1 : 50%
   * KLAY Lending Pool KLEVA Token Reward Ratio of D-day =\
     30,000 x 100% = 30,000 KLEVA

### <mark style="color:blue;">Unissued KLEVA Tokens</mark>

The amount of KLEVA Tokens unissued due to conditional release will be added to the last year of the KLEVA Tokens minting schedule. However, as KLEVA minted per block decreases monthly, KLEVA minted per block in the last year would converge to zero.

So in reality, the unissued amount will never be minted. Thus, conditional release will have a similar effect as the Buyback and Burn mechanism, effectively controlling the inflation ratio of KLEVA Tokens.


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