Liquid Pylon Pool for Nexus Protocol
One of the flagship features of Pylon Gateway is the “lossless” Pylon Pool, where users can stake TerraUSD (UST) in return for project tokens, with the projects receiving a portion of the yield and 20% of the yields contribute to value accrual for stakers of Pylon’s governance token (MINE) via buybacks and treasury-building.
With the launch of Liquid Pylon Pools for Nexus Protocol’s governance token ($Psi), Pylon Gateway aims to address the long UST lockup durations per Pylon Pool and to derive extended liquidity from lockup pools.
This will be the first experiment to establish Liquid Pylon Pools for $Psi so as to allow depositors to receive a derivative Pylon Pool token, which grants them the future accumulating $Psi token rewards from the Pylon Pools on top of being able to claim the underlying locked UST.
The design of the Liquid Pylon Pools for $Psi will be similar to bAssets and nAssets given that the rewards from each Pylon Pool will be distributed to token holders, allowing such “tokenized” Pylon Pools the potential to be liquid. A liquid staked derivative of Pylon Pools for $Psi adds flexibility to users who want to receive the benefits of lossless investing, as well as the opportunity to opt in and out of their long-term lockup positions easily.
In partnership with Nexus Protocol, the derivative Nexus Pylon Pool token (bPsiDP-24m) — Psi pair will be established. The initial price of Nexus Pylon Pool token will start at the initial Net Present Value of the pool using Anchor Earn as a discount rate.
Although the underlying UST deposited into the Liquid Pylon Pool for $Psi is designed to be locked for 24 months, the derivative pool token (bPsiDP-24m) is claimable and tradable at any point in time. $Psi rewards are vested linearly from the launch of Liquid Pylon Pool for $Psi, claimable at any point.
The derivative token (bPsiDP-24m) represents a user’s stake of UST in the Liquid Pylon Pool. Upon depositing UST into Liquid Pylon Pool for $Psi, users can manually add the bPsiDP-24m token address on Terra Station:
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If the market believes the discount rate should be lower than the Anchor Earn rate, then users would purchase Nexus Pylon Pool token at Nexus Pylon Pool token—Psi liquidity pool, effectively decreasing Net Present Value discount rate for the market. Similar to nAsset-Psi pairs, rewards for Pylon Pool tokens in LP will be collected and accumulated in the liquidity pool.
For project teams, Liquid Pylon Pools may accrue more UST deposits, allowing more users to jump in without fretting about long lockup durations, as well as more flexible options to customize their project token fundraising on Pylon Gateway. For Pylon Pool participants, this upgrade means now users will now be able to freely exit the pools before the vesting period finishes. For Pylon Protocol, more active participation and utilization of Liquid Pylon Pools will improve and strengthen the value accrual of the protocol and MINE tokens.
With added flexibility via Liquid Pylon Pools, we hope that our collaboration with Nexus Protocol can allow for a sustainable and lasting option to support projects building on top of Terra ecosystem, while being the infrastructure for the community to actively participate and share the upside of the new and upcoming projects.
Liquid Pylon Pools for $Psi are currently available for deposits on Pylon Gateway
For information on Liquid Pylon Pools, please read the following article from Nexus Protocol: https://nexus-protocol.medium.com/nexus-liquid-pylon-pool-protocol-owned-assets-5bb44bf3184
