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BTC Allocation
The proportion of BTC allocated to a particular Layer 2 protocol is determined by a yield and risk optimized strategy.
Every month (also referred to as epoch), veACRE holders vote to determine how BTC is allocated to L2 protocols. Votes are are measured via Snapshot and executed by the Acre Security Council.
Each Layer 2 will receive an allocation based on the proportion of yield it contributes, and it’s risk score relative to other protocols.
Acre DAO can decide upon the yield-to-risk ratio by setting the Yield_Weight and Risk_Weight values. The risk score of each protocol will be determined by a risk assessment rubric.
In the future, the DAO can vote to implement an allocation system based on direct veACRE votes. Supported Layer 2 protocols can incentivise veACRE voters to vote for their respective protocols, in the same way that liquidity pools on Curve can be incentivised via veCRV votes.