How Rewards Reach sUSDx

Rewards are discretionary

Staking is a single, atomic step: you deposit USDx into the Axis Rewards Vault (sUSDx) and receive sUSDx in return, at the current exchange rate, with no further action and no cost to begin accruing. From that point your position accrues whatever rewards the protocol chooses to make available in the vault.

That last point is the important one. Rewards are fully discretionary. They are best understood as forward-looking, a signal of what the protocol is willing to pay for capital, a capital cost it elects to bear, rather than a backward-looking pass-through of whatever the reserves happened to earn. What the vault distributes and what the backing earns are separate and unbundled: the reserves may grow or contract with little or no direct relationship to the rewards available in the vault at any given time.

This is deliberate. The protocol earns from its trading strategy (see How Axis Earns Yield), but the amount it chooses to pay out as rewards is a discretionary capital-cost decision, not a mechanical redistribution of realized yield. A realized strategy result does not change sUSDx accounting on its own, nothing reaches the vault until USDx rewards are actually funded to it, and how much is funded is a decision, not a formula.

Backing assets are deployed into market-neutral strategies, and realized results grow the reserves. That growth goes one of two ways: it stays in the reserves, deepening over-collateralization so the buffer absorbs a bad period, or it is funded into the rewards vault, where it vests linearly and each sUSDx position comes to represent more USDx. The split is a decision, not a formula.

What the vault does and does not do

The vault does not rehypothecate and does not lend out the USDx staked into it. The staked USDx simply sits in the vault and accrues rewards as they are funded; holding it is what makes a staker eligible for the protocol's incentive reward distributions. Because the stake is not put at risk to generate the reward, unstaking returns at least the initial stake plus the share of rewards that accrued while you were staked (subject to the exchange rate and redemption timing described below).

By the same separation, the vault does not bear the cost of reserve losses. Negative growth in the reserves is not passed through to USDx or sUSDx holders as a clawback against their positions. This is a statement of how the design is intended to behave, not a guarantee of return, the reserves and their risks are described in Backing, Custody & Transparency.

Comparable designs

Reward-bearing vaults where a position accrues value in the underlying asset rather than requiring a manual claim are an established DeFi pattern, see, for example, Yearn and Centrifuge.

Three different quantities

Because payout is discretionary and unbundled from strategy results, it helps to keep three quantities distinct:

Quantity	Meaning	Included in sUSDx accounting?
Expected strategy return	What a trade or asset is projected to earn	No
Realized strategy return	What remains after execution, financing, settlement, and valuation or closing	Not by itself
Distributed vault reward	USDx delivered to the vault and accepted for vesting	Yes

Only the last row moves the vault. An expected opportunity, or even a realized strategy result, does not change sUSDx accounting until USDx rewards are funded to the vault.

How a funded reward reaches the vault

Rewards are delivered to the vault as USDx by the reward manager, which calls fundRewards under REWARD_MANAGER_ROLE. A funded reward does not hit the exchange rate all at once: it vests linearly over a configured window, and only the vested portion counts toward vault assets. As rewards vest, each sUSDx comes to represent more USDx and the exchange rate rises smoothly rather than jumping on each funding, so a large deposit cannot front-run a reward and capture it instantly. Your sUSDx balance never changes; each token simply comes to represent more USDx.

By design the vesting mechanism only feeds positive or flat amounts into the exchange rate, so the intended behaviour is for the USDx-per-sUSDx rate to rise or hold steady rather than step down on each funding. That describes how vesting is built; it is not a promise that the rate cannot fall, that funding will continue, or that USDx's market price is protected.

This mechanism determines only how a delivered reward is recognized. It does not verify the strategy's offchain positions, guarantee future transfers, or protect USDx's market price. For the vault mechanics, see What is sUSDx?.

Why a quoted APY can differ

A strategy estimate, a realized strategy report, and an sUSDx holder result can differ because of costs, timing, reward delivery, vesting, entry and exit time, USDx price changes, and redemption timing (cooldown and servicing).