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Vine Money
  • Introducing Vine Money
  • Introduction
    • Underlying Tech
    • Market Opportunity
    • Growth Strategy
  • Protocol
    • Deposit Collateral and Mint vUSD
    • Dynamic Liquidity Provisioning
    • Stability Pool and Liquidations
    • Redemptions and Peg Stability
    • Protocol Fees
    • Recovery Mode
    • Supported Collaterals
    • Privacy Mechanics
  • Governance
    • The VINE Token
    • Staking Weight
    • Rewards Boost
    • Rewards Voting
    • Revenue Share
    • DAO Governance
  • Guides
    • Deposit
    • Provide dLP
    • Earn
    • Rewards
    • Boost
    • Redeem
    • Vote
  • Resources
    • Contracts
    • Audits
    • Brand Assets
    • FAQ
  • DISCLAIMER
    • Disclaimer
    • Privacy Policy
    • Service Agreement
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On this page
  • Understanding dLP in Vine Money
  • Mechanics and Calculations in dLP
  • Impact and Benefits of dLP
  1. Protocol

Dynamic Liquidity Provisioning

PreviousDeposit Collateral and Mint vUSDNextStability Pool and Liquidations

Last updated 1 year ago

Dynamic Liquidity Provisioning (dLP) in Vine Money is a foundational element designed to enhance the platform's liquidity while rewarding user participation. Predominantly focused on the VINE/ROSE liquidity pool (LP), dLP plays a crucial role in activating (or boosting) extra protocol rewards and ensuring the stability of the ecosystem. This section details the mechanics of dLP in Vine Money.

Understanding dLP in Vine Money

  • dLP Activation for Rewards: To qualify for extra protocol rewards in VINE tokens, users are required to pair VINE and ROSE and deposit them in the VINE/ROSE LP, proportionate to the amount of vUSD they have minted. This rensures deep liquidity and protocol health.

Required dLP Tokens=Minted vUSD Value×Minimum dLP Percentage\text{Required dLP Tokens} = \text{Minted vUSD Value} \times \text{Minimum dLP Percentage} Required dLP Tokens=Minted vUSD Value×Minimum dLP Percentage

  • Incentive for Liquidity Contribution: Users are incentivized to contribute more significantly to VINE, aligning their interests with the platform's long-term stability and growth, by ensuring deep liquidity of the protocol's governance token.

Mechanics and Calculations in dLP

  • Minimum dLP Requirement: Users are required to deposit at least 2.5% of the value of their minted vUSD in the VINE/ROSE LP to qualify for additional VINE rewards across the ecosystem. For example, if you mint $1,000 worth of vUSD, the calculation would be as follows:

Required dLP Tokens=1000×2.5%=25 USD worth of dLP Tokens\text{Required dLP Tokens} = 1000 \times 2.5\% = 25 \text{ USD worth of dLP Tokens} Required dLP Tokens=1000×2.5%=25 USD worth of dLP Tokens

  • LP Rewards: Users also receive rewards for contributing to the LP. The greater the locked amount, the higher the potential rewards. Furthermore, users can enhance their base rewards by locking additional VINE tokens as veVINE, as detailed in the section.

User Rewards=Base Rewards Pool×(User’s Locked dLP ValueTotal Locked dLP Value)\text{User Rewards} = \text{Base Rewards Pool} \times \left( \frac{\text{User’s Locked dLP Value}}{\text{Total Locked dLP Value}} \right) User Rewards=Base Rewards Pool×(Total Locked dLP ValueUser’s Locked dLP Value​)

  • Adjusting Locked Tokens: Users have the ability to manage their dLP holdings, either to maintain or increase their eligibility for extra rewards. If market fluctuations lead to a user's dLP falling below the minimum requirement, they will cease to be eligible for VINE rewards.

Impact and Benefits of dLP

  • Liquidity Enhancement: dLP encourages substantial liquidity contributions, crucial for vUSD stability and efficient platform operations.

  • Protocol Health and Stability: By locking liquidity tokens, users provide a buffer against market fluctuations, contributing to the platform's resilience.

  • Long-Term Engagement: The dLP system promotes sustained user engagement, fostering a stable and growing community within Vine.

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