Boost-Locking & Staking for Increased Yield
As part of recent discussions surrounding token utility innovations aimed at offering APY token holders opportunities to earn rewards for participating in various platform operational mechanics, we’ve teased ‘boost-locking’.
With a governance proposal for boost-locking now underway, we are aiming to clarify in this article, a bit more in-depth, some of the inner workings of boost-locking and how APY token holders and platform users can benefit from boost-locking their tokens.
What is Boost-Locking?
Boost-locking will allow APY token holders to stake their APY tokens for a selected duration, and earn boosted APY yield. This will allow users who are more committed to the long-term vision of APY.Finance to be rewarded with additional APY yield returns as a result.
Boost-locking may also open the doors for additional opportunities for incentivization in the future, rewarding users who boost-lock in different ways. In the future, this may mean additional voting strength, fewer platform fees once platform fees are implemented, and more.
Earning Additional APY Yield via Boost-Locking
In exchange for staked APY, users will receive ‘blAPY’, a placeholder token representative of their staked APY.
Users will be assigned blAPY based on:
- Amount locked up
- Duration of lockup.
Example:
100 APY deposited for 1 year → 100 * (1 year / 4 years) = 25 blAPY
200 APY deposited for 6 months -> 200 (0.5 year / 4 years) = 25 blAPY
Together, these metrics will form the basis for evaluating each user’s proportion of additionally earned rewards. Users who stake larger amounts of APY tokens for longer durations will be assigned more blAPY, and thus earn more rewards as a result.
Users will be able to select a boost-lock duration between 1 week -> 4 years in 1-week increments. Users will also be able to stake additional APY, and will be able to increase the lockup duration of their staked tokens over time.
Users will be able to stake their tokens for a maximum duration of 4 years, and users with the largest boost-lock scores will be able to earn a minimum boost of 1x without any boost-locking, and a maximum of ~2.5, based on the following formula:
min( AccountValue * 40 / 100 + (TVL * blAPY Balance / blAPY Total Supply) * 60 / 100), AccountValue)
- ‘blAPY’ represents the placeholder token users will receive in exchange for their boost-locked APY, representative of their boost-locked position.
- ‘AccountValue’ is a weighted average between the user’s total account value and the proportion of the TVL as given by their blAPY share.
The additional APY yield will be emitted via our already existing Liquidity Provision Rewards program. If Liquidity Mining incentives cease in the future, blAPY can be incentivized in other ways. Users will be able to withdraw all locked APY if boost-locking and blAPY is phased out for any reason, including as a result of governance votes on the matter as the platform continues to decentralize.
We hope this article provided the additional insight necessary to make an informed decision when participating in the boost-lock governance proposal. APY token holders and liquidity providers can head over to the governance proposal to vote now.
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