dLP $ZERO

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 LdLPL_{dLP}. As mentioned already, $ZERO tokens in the dLP stake are given double weight. Hence, (2×$ZERO) (2 \times \$\textrm{ZERO}).

$veZERO=dLP×LdLP\$\textrm{veZERO} = dLP \times L_{dLP}
$veZERO=(2×$ZERO2)×LdLP \$\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 LockL_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.

Formula for $veZERO Allocation:

The total $veZERO a user receives is determined by:

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

In this equation:

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

  • dLPdLP 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:

$veZERO=$ZERO1×LZERO+(2×$ZERO2)×LdLP\$\textrm{veZERO} = \$\textrm{ZERO}_1 \times L_{ZERO} + (2 \times \$\textrm{ZERO}_2) \times L_{dLP}

Here, $ZERO1\$\textrm{ZERO}_1 and $ZERO2\$\textrm{ZERO}_2 denote the respective amounts of $ZERO in single staking and within the dLP.

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