dLP Utility
Users that simply deposit but don't add value to the protocol will continue to earn natural market rates, but will not be eligible for RDNT emissions.
Below, you can see "Natural Market Rates" highlighted in Red, and "RDNT Emissions" highlighted in blue/purple:
Users can provide a minimum of 5% locked dLP tokens relative to the size of their deposits (in USD terms) to activate RDNT emissions on deposits & borrows.
User 1: Deposits $1M USDC on Radiant and has $0 of dLP tokens locked. The user would earn a base rate (APY) but not incentivized emissions.
User 2: Deposits $1,000 USDC on Radiant and has $50 dLP locked. This user would be eligible for RDNT emissions (assuming the minimum 5% threshold is met).
Via this flywheel, an exciting feedback loop can potentially develop that can be constructive in helping attract long-term liquidity and rewarding those most aligned with the long-term success of the protocol.
Requiring locked liquidity tokens helps incentivize long-term participation in the Radiant DAO money market. By locking liquidity, participants are committing for a set period and therefore are incentivized to retain their deposited collateral to activated RDNT emissions. This can help to attract more liquidity providers to the market, which can, in turn, help to drive growth and development.
On the Markets Page, a user can review the Max dLP Locking APR - as well as a breakdown of the APR per asset (see video below).
How is the "Maximum Lock APR" calculated?
- Definition: Maximum APR when dLP is locked for 1 year
- Calculation: 1 month lock APR * 1 year lock multiplier (25x)
Example: 1 month locking APR:
- Definition: Current locking APR for 1 month
- Calculation: (Total 1 Month Lockers’ Share of Annualized Protocol Fees) / (Total 1 Month Lockers’ Share of dLP Pool Size)
1 Month Locker Share of Protocol Fees:
-Calculation: (1 Month Locker Share of Protocol Power / Total Protocol Locking Power)
Total Protocol Locking Power:
- Calculation: (1 Month Lockers Share of dLP Pool Size * 1 Month Locker Multiplier (currently 1x)) + (3 Month Lockers’ Share of dLP Pool Size * 3 Month Locker Multipler (currently 4x)) + (6 month Lockers’ Share of dLP Pool Size * 6 month Lockers’ Multiplier (currently 10x)) + (12 month Lockers Share of dLP Pool Size * 12 Month Locker Multipler)) = Total Protocol Locking Power
Last modified 14d ago