Everything you need to know about SLP
What is SLP?
SLP, or Sudo Liquidity Provider token, is a unique token issued by the Sudo protocol that represents a user’s share in Sudo’s liquidity pool. The Sudo liquidity pool is a crucial component of the platform, facilitating leveraged trading by providing the necessary liquidity.
When users acquire SLP tokens, they are effectively staking their assets in Sudo’s liquidity pool. These staked assets serve as the liquidity that enables leveraged trading on the platform. Currently, Sudo accepts three types of assets for its liquidity pool: SUI, USDC, USDT, and NAVX.
By contributing liquidity to the pool, SLP holders play a vital role in the Sudo ecosystem. They not only enable leveraged trading but also earn a portion of the trading fees generated on the platform as rewards for their provided liquidity.
Sudo: The future GMX on Sui
GMX is a well-known perps protocol running on Arbitrum since 2022. To date, GMX has reached $210,000,000,000 trading volume in total. GMX follows the trader-to-pool model, where LP s provide liquidity to GMX by minting GLP, and traders borrow assets from GLP pool to trade against LPs.
GMX has currently accumulated $83,137,850 in GLP pool, with APR around 18.85%.
Sudo, as one of the first on-chain perps protocols on Sui, follows a similar model as GMX. In fact, SLP is modeled after GLP. SLP holders are eligible to share the protocol fees. 75% of the trading fee would go to the SLP holders while the rest 25% are reserved for Sudo’s treasury.
Compared to GMX, Sudo is still early. As of today, Sudo has achieved $31,000,000 in trading volume, with $215,000 fees collected from trading. SLP APR is now around 135% — this suggests if Sudo is growing at current rate, it will accumulate fees in 135% of current pool size.
SLP’s Dynamic and Asset-Backed Tokenomics
SLP is a liquidity provider token backed by the underlying assets in Sudo’s liquidity pool. Its total value is directly tied to the total value of assets in the pool, such as SUI, USDC, and USDT. When new liquidity is added, more SLP tokens are minted proportionally, but the price of each SLP token remains relatively stable as the increase in supply is offset by the increase in the pool’s total value. Conversely, when liquidity is withdrawn, a corresponding amount of SLP is burned. SLP’s supply adjusts dynamically based on liquidity provision and withdrawal, ensuring its value is always derived from the assets backing it in the pool.
Benefits of Minting SLP
- Earning Yield
By contributing liquidity to Sudo’s liquidity pool and receiving SLP tokens, users can earn a share of the trading fees generated on the platform. This provides a passive income stream proportional to the amount of liquidity provided, rewarding users for their participation in the ecosystem. - S Points Accumulation and S Card Upgrades
Minting SLP tokens allows users to accumulate points, which can be used to upgrade their S Cards. Upgraded S Cards offer several benefits, including fee rebates and higher allocations in future Token Generation Events (TGEs). For a comprehensive list of S Card and points benefits, please refer to the S Card benefits section. - Campaigns and Airdrops
SLP holders will be eligible for exclusive campaigns and airdrops, providing additional opportunities to earn rewards. These initiatives are designed to incentivize active participation and long-term commitment to the Sudo ecosystem. - Upcoming Incentives
We are developing new features to enhance benefits for SLP holders. These incentives aim to align liquidity providers’ interests with the growth of the Sudo protocol, offering more rewards for minting and holding SLP tokens.
Maximum Supply and Protocol Growth
The current maximum supply of SLP tokens is capped at 500,000. This strategic decision aims to foster a sustainable and scalable growth trajectory for the Sudo protocol. As more liquidity is contributed to the pool, the platform’s capacity for facilitating leveraged trading increases, generating more trading fees that directly benefit SLP holders.
However, the Sudo team recognizes the potential for future expansion and is open to adjusting the maximum supply if necessary to accommodate the protocol’s growth. By maintaining a flexible approach, Sudo can adapt to evolving market conditions and user demand, ensuring the long-term viability and success of the ecosystem.
Expanding Trading Horizons for SLP
While the primary purpose of SLP tokens is to represent a user’s share in Sudo’s liquidity pool, we recognize the importance of providing diverse trading opportunities for token holders. To this end, we have established a dedicated pool on Cetus, a decentralized exchange, enabling SLP holders to swap their SLP for other tokens, even outside of Sudo’s regular trading hours.
However, the team’s ambitions extend far beyond the Cetus partnership. As the Sudo ecosystem continues to grow and evolve, the team remains committed to actively seeking out and forging strategic collaborations with additional trading venues and platforms. These partnerships will further enhance the utility and accessibility of SLP tokens, ensuring that holders can seamlessly navigate and participate in the broader DeFi ecosystem.
We keep building! Full speed ahead!
