What is dLP?

Lock dLP, activate emissions!

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

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

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.

To trigger RDNT emissions on both deposits and borrows, you must lock at least 5% of your deposit's USD value in dLP tokens.

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

On the Markets Page, 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:

How to lock dLP