# What is dLP?

Dynamic Liquidity Provisioning (dLP) is a novel approach approved by the Radiant DAO designed to counteract mercenary capital and ensure a more equitable value exchange between long-term users and the protocol.

Liquidity pools are crucial to many DeFi protocols, allowing users to provide liquidity in the form of paired assets—such as RDNT & ETH or BNB—in exchange for a share of the pool's potential yield.

dLP tokens can be locked through the protocol to activate RDNT emissions within the money market, receive a portion of protocol revenue, and gain governance voting power.

## dLP Utility <a href="#pdf-page-7kculrfky7prnk13pzec-dlp-utility" id="pdf-page-7kculrfky7prnk13pzec-dlp-utility"></a>

In exchange for users enhancing the utility of Radiant by locking Dynamic Liquidity tokens, there are three primary rewards:

1. Activate $RDNT emissions on deposits & borrows
2. Share in platform fees comprised of blue-chip assets such as Bitcoin, Ethereum and stablecoins
3. Obtain voting power for governance via the Radiant DAO

<figure><img src="https://896179941-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2Fc8CwAEN8ihh81y90gyG1%2Fuploads%2FkfNoXVUGaw5GMV2RvQ3A%2FUtility%20Flow%20Chart%20with%20ETH.png?alt=media&#x26;token=db2881df-1f97-46b9-b874-c8b98487d6e1" alt=""><figcaption></figcaption></figure>

Below, you can see **natural market rates** highlighted in red and RDNT emissions directly underneath, in blue/purple. Users who 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.

<figure><img src="https://896179941-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2Fc8CwAEN8ihh81y90gyG1%2Fuploads%2FaKHfU8SRq0vJCPK85Dtk%2Fimage.png?alt=media&#x26;token=b20ec9f4-a304-46b3-819f-4bfdb267ec7b" alt=""><figcaption></figcaption></figure>

{% hint style="info" %}
**To trigger RDNT emissions on both deposits and borrows, you must lock at least 5% of your deposit's USD value in dLP tokens.**
{% endhint %}

**Example 1:** If you deposit $1M USDC but have zero dLP tokens locked, you'll earn the basic APY but won't qualify for additional RDNT emissions.

**Example 2:** Deposit $1,000 USDC and lock $50 in dLP tokens. Now you're eligible for RDNT emissions, thanks to hitting that 5% threshold.

**The requirement to lock liquidity tokens in dLP form serves the Radiant money market in multiple ways:**

1. **Long-Term Participation:** Locking dLP tokens effectively commits users to a set period, increasing the likelihood that they'll maintain their deposited collateral.
2. **RDNT Emissions Activation:** This commitment enables RDNT emissions, rewarding those who are invested in the protocol's long-term vision.
3. **Attracting New Users:** The above dynamics make the Radiant money market more appealing to potential liquidity providers, thereby stimulating both growth and development.

This strategic cycle not only sustains long-term liquidity but also catalyzes new inflows, making it a win-win for both individual users and the protocol at large.

### Max dLP Locking APR <a href="#pdf-page-7kculrfky7prnk13pzec-max-dlp-locking-apr" id="pdf-page-7kculrfky7prnk13pzec-max-dlp-locking-apr"></a>

On the [Markets Page](https://docs.radiant.capital/radiant/project-info/markets), a user can review the Maximum dLP Locking APR, as well as an asset breakdown modal highlighting the APR per asset.

#### **Maximum Lock APR**

This is calculated as the highest APR achievable when dLP is locked for a one-year period.

* **Formula**: `1-month lock APR * 1-year lock multiplier (25x)`

#### **1-Month Locking APR**

This is the current APR for locking your dLP tokens for a one-month period.

* **Formula**: `(Total 1 Month Lockers’ Share of Annualized Protocol Fees) / (Total 1 Month Lockers’ Share of dLP Pool Size)`
* **Formula**: `(1 Month Locker Share of Protocol Power) / (Total Protocol Locking Power)`

#### **Total Protocol Locking Power**

The sum of all lockers’ shares, each adjusted by its respective multiplier.

* **Formula**:

```
= (1 Month Lockers' Share of dLP Pool Size * 1 Month Locker Multiplier (1x)) 
+ (3 Month Lockers’ Share of dLP Pool Size * 3 Month Locker Multiplier (4x))
+ (6 Month Lockers’ Share of dLP Pool Size * 6 Month Lockers’ Multiplier (10x))
+ (12 Month Lockers' Share of dLP Pool Size * 12 Month Locker Multiplier)
```

To learn more about how to lock dLP, please navigate to its section:

{% content-ref url="../../manage-radiant/dlp/how-to-lock-dlp" %}
[how-to-lock-dlp](https://docs.radiant.capital/radiant/project-info/manage-radiant/dlp/how-to-lock-dlp)
{% endcontent-ref %}