cabalINIT

cabalINIT is an implementation of Cabal's LST-as-a-Service for for the Initia ecosystem. It is not a speculative asset; instead, it addresses a structural inefficiency within Initia’s incentive mechanism by converting idle TVL into productive captial.

Structural Capital Inefficiencies

On Initia, interwoven rollups (appchains) often control significant amounts of INIT-denominated capital. This capital typically ends up in the Balance Pool of VIP, which accounts for a minority of total network emissions, rather than the Weight Pool, which captures the majority of network emissions.

As a result, large portions of ecosystem capital are economically underutilized.

How does cabalINIT work?

Rollups whitelist cabalINIT as their own unique token, which we will generically call "rollupINIT". In practice, the token has its own metadata, name, and icon.

Once setup, users only see and interact between INIT and rollupINIT, seamlessly swapping in and out. The rollupINIT represents a liquid and composable LST that is instantly 1:1 redeemable for INIT at any time.

Under the hood however, rollupINIT is minted and redeemed accordingly using a mix of the underlying xINIT and INIT float. In the example below, the float is set to 20%:

Why do rollups integrate cabalINIT?

cabalINIT is backed by a mix of xINIT and INIT. This means that rollups can convert their idle TVL into productive xINIT, which provides the rollup with massive voting boost for extra emissions from Initia's VIP system.

At a float of 20%, each cabalINIT generates (0.8 xINIT * 4) + (0.2 INIT * 0) = 3.2 units of voting power. A portion of this voting power is kept for Cabal's appchain, which generates excess and sustainable yield for Cabal depositors.