INTRODUCTION
Last updated
Last updated
Loopfi is a decentralized user-owned protocol by offering a multi-chain liquidity solution for veToken (‘vote-escrowed token’) (i.e., veCRV, time-locked CRV participating in Curve staking) holders, which allows participants to stake from layer2 or other chains supported, earn various protocol fees and claim boosted rewards without sacrificing the liquidity of veToken.
By staking via Loopfi, veToken holders or its LP tokens can gain max boost on staking rewards, platform fees, and governance voting weight, with immediate liquidity access for their time-locked veTokens.
veToken holders can also receive LPF (governance token of Loopfi) in addition to the above staking rewards, platform fees etc.
Loopfi envisions to become a DeFi infrastructure by enabling multichain staking solutions for protocols built with veToken model. Simply put, for protocols built with veToken model on Ethereum, their token holders can stake on layers2 or other faster/gas efficient blockchains supported. This is a great improvement over existing veToken model, which is often enabled on Ethereum mainnet only.
veToken is featuring a long-term lock-up strategy, meaning that users are incentivized to lock their veTokens for a longer period to receive more staking rewards and more platform fees. However, the time-locked veToken is usually non-transferable with the amount gradually decays until the locking period expires when users can reclaim their original token back. This mechanism has low capital efficiency and fragmented liquidity for token holders.
This is what Loopfi is trying to solve – Loopfi allows users to convert their veTokens into pTokens at 1:1 and gain immediate liquidity access via swap whilst preserve all benefits including staking rewards, platform fees and other extra incentives from supported DeFi protocols.
Everyone using Loopfi is pooling governance tokens of supported protocols to acquire more veTokens, hence upside of platform fee sharing from supported DeFi protocols. At a default strategy, Loopfi will automatically maximize the staking rewards by always staking for longest term available, i.e 4-year.
So, if you stake governance token or LP tokens through Loopfi, you will be able to always have the highest staking yield as well as the greatest fee sharing (net of related fees) of the underlying supported DeFi protocols.
Important: Same as Convex, converting veToken to pToken is irreversible (permanently, not time-locked). But pToken is transferable (unlike veToken) and you can sell your pToken for its corresponding underlying token.
Staker: To lock assets into Staking Protocols and acts as a voter powered by veToken.
Booster: Get rewards from Staking Protocols and boost them to Layer2.
Depositor Proxy: Act as a Layer2 depositor, to deposit assets (bridged over from Layer2), get rewards and bridge them back to Layer2.
Staking Protocols: Protocols featuring veToken model with staking yields, for example, Curve, dForce, Balancer, BendDao, etc.
Depositor: Users deposit Tokens into 'Depositor' and receive pTokens as depositing certificate. Loopfi will bridge Tokens to Ethereum and lock them into Staking Protocols.
Booster: Get rewards via bridging from Ethereum and boost them to Reward Pool.
Reward Pool: A staking pool (config as a fix duration distribution pool) that distributes rewards from layer1 to users who stake their pTokens on layer2. New rewards bridged from layer1 will restart the distribution of rewards for the same length of time.
Cross-chain bridge infrastructure supporting token bridging and inter-chain communication.
Loopfi offers a general solution for protocols with veToken model. We are open to support other projects, subject to governance approval.
The first project we support is dForce (DF). There are a number of other considerations including Balancer, Saddle Finance, etc., which will be announced in due course.
