dLP Staking

The dynamic Liquidity Provision (dLP) model for $ZERO is specifically designed for users who contribute to liquidity pools. When users stake dLP tokens, consisting of 50% $ZERO and 50% of a partner token like $ETH, their $ZERO portion is effectively doubled in value for staking purposes.

Enhanced Weighting for $ZERO

A distinctive feature of the dLP ve-staking model is the enhanced weighting given to $ZERO tokens at the time of staking. When calculating the value of a user's contribution to the liquidity pool, the $ZERO component is effectively considered double its presence in the pool.

Example: If a user's liquidity pool token consists of 50% $ZERO and 50% $ETH, the weighting mechanism acknowledges the $ZERO component as if it were 100% of the contribution.

When staking is locked, the dLP weighting for $ZERO is counted as double its amount in the liquidity pool token.

Calculation Method

$veZERO earned is the product of the quantity of dLP tokens staked and a locking factor $L_{dLP}$. As mentioned already, $ZERO tokens in the dLP stake are given double weight. Hence, $(2 \times \$\textrm{ZERO})$.

$$\$\textrm{veZERO} = dLP \times L_{dLP}$$

$$\$\textrm{veZERO} = (2 \times \$\textrm{ZERO}_2) \times L_{dLP}$$

Time-Locking Coefficients

Another distinctive feature of the dLP ve-staking model is time-locking coefficients. ZeroLend modifies the time-locking coefficients for dLP stakes to suit the unique risk profile of liquidity pool tokens. The following is the time scale for dLP:

Time Lock	L_dLP - Value
1-Months	0.0625
3-Months	0.25
6-Months	0.5
12-Months	1.0

This adjusted time scale reflects the nuanced differences in risk profile compared to staking single assets.

Practical Example

A user staking 10,000 dLP tokens, split into 5,000 $ZERO and an equal value of $ETH for a 6-month period, will be allocated 5,000 $veZERO.

The formula for $veZERO Allocation:

The total $veZERO a user receives is determined by:

$$\$\textrm{veZERO} = \$\textrm{ZERO} \times L_{ZERO} + dLP \times L_{dLP}$$

In this equation:

• $L_{ZERO}$ and $L_{dLP}$ represent the time-locking coefficients for single-asset $ZERO and dLP stakes, respectively.

• $dLP$ is valued as twice the amount of $ZERO present at the time of staking.

To clarify, the formula accounts for the different quantities of $ZERO in single and dLP stakes:

$$\$\textrm{veZERO} = \$\textrm{ZERO}_1 \times L_{ZERO} + (2 \times \$\textrm{ZERO}_2) \times L_{dLP}$$

Here, $\$\textrm{ZERO}_1$ and $\$\textrm{ZERO}_2$ denote the respective amounts of $ZERO in single staking and within the dLP.