$PIXL Locked LP Protocol
The $PIXL Locked LP Protocol is a brand new reward protocol design created by the Pixlverse Tokenomics team. It is similar in nature to the 'Normal LP' protocol however introduces an additional unique form of yield that is leveraged to the growth of the entire Pixlverse ecosystem.
Traditional yield farming isn't sustainable. This is because the only thing being rewarded is new inflation of the same token you've deposited in the first place and naming said inflation 'yield'. The problem with this system is that in order to realize your yield, the token must be sold into another currency (such as ethererum or stablecoins). When active liquidity providers sell their yield, they are essentially selling into themselves at best or naive latecomers to the protocol at worst. This slowly diminishes their LP value over time. This works for a period of time as newcomers salivate over the eyebulging APR%'s on offer and flood to the protocol, but eventually this system collapses on itself as new entrants to the protocol slow and turn negative (hence the term ponzinomics).
The Locked LP Protocol works in a slightly different way to the Normal LP protocol. Participants must agree to a timelock, whereby they can not remove their LP tokens from the staking pool without incuring a 'tax'. If they remain in the locked contract for the entire duration, then you will not only be rewarded with PIXL yield in the same fashion as the Normal LP protocol, but as a 'loyalty' reward they generate low circulation productive NFT assets as well!
We have talked in depth about our 'glitch serum' - and this will be the first iteration of productive NFT asset yield that is produced through this new protocol. With only 500 'glitch serums' available the future value of this abstract yield isn't quantifiable, but we imagine it will be a very sought after asset for die hard competitive Pixl Pet gamers and is directly leveraged to the upside within the Pixlverse ecosystem.
The glitch serum is just the beginning of the Locked LP protocol. More and more NFT 'legos' will be offered through this protocol. We dub them 'legos' because they become the building blocks of player owned assets across the entire Pixlverse ecosystem. New iterations of this protocol will build on top of previous interations, making it economically viable to partipate in this system over a long time horizon.
Like the Normal LP protocol the Locked LP protocol generates rewards on a block by block basis (as ETH is mined at the crypto level) for users of the protocol. These rewards are based on a deterministic function balancing your contribution versus the overall pool of $PIXL staked by all users and rewards you with a percentage of each total block reward generated over the duration of your time staked within the protocol combined with any Yield Enhancing NFTs that were staked alongside it.
Additionally the Locked LP protocol will generate an exclusive 'glitch serum' NFT claimable at the end of the eight week time lock period if all requirements are met.
A total of 100 million $PIXL tokens (and 450 'glitch serums') will be distributed to stakers through a 1 year duration LP contract (26 two week epochs) - these token rewards are distributed over the course of the year via a front ended logarithmic function. Serum's will be available at the conclusion of the 8 week lock cycle (note: this token yield is shared across both the 'Normal' and 'Locked' LP Protocols). Note that the reward pool may be extended after conclusion of the twelve months depending upon the econometric circumstances within the in-game token economy.
To participate within this protocol at flagship launch; stakers must commit to providing 1 ETH plus the equivalent PIXL to the liquidity pool for an eight week time locked period.
This protocol has time locked constrainsts. This means that once you commit to entering the locked pool you will be required to pay a 'tax' if you wish to withdraw your tokens before the end of this window - this tax schedule is detailed below. PIXL rewards generated through the protocol are subject to a vesting schedule as described in 'DeFi Protocols', with long term stakers rewarded with larger percentages of unlocked $PIXL vs vested $vPIXL compared to early withdrawers - this unlock schedule is detailed below.
The protocol works in the same manner as the 'Normal Protocol' with a few additional wrinkles, you'll find it incedibly easy to learn through our beautifully designed web based UI.
Here is a step by step guide walking through the process on a conceptual level:
- Users will have $PIXL available in their ETH wallet - this is harvestable if you have a staked Sappy Seal, or alternatively you can obtain some via Sushiswap or other popular DEX's
- Users will have $ETH available in their ETH wallet
- Users will choose an amount of $PIXL and an equivalent amount of ETH they would like to stake to the normal LP protocol - the minimum requirement is at least 1ETH equivalent of the two tokens
- Users will stake this amount of $PIXL and ETH to the liquidity pool and commit to keeping it locked in the liquidity pool for a minimum of eight weeks
- The smart contract will mint a PIXL/ETH LP token to the user which represents your share of the liquidity pool
- Users will stake their PIXL/ETH LP token to the staking contract
- Based on your weight of the overall amount of PIXL/ETH LP tokens staked by all users of the protocol, you will begin accruing PIXL rewards on a block by block basis
- As an example: lets assume ten users have staked PIXL/ETH LP tokens in equal amounts to the staking contract - all users will recieve 10% of each block reward over time
- As an example: lets assume two users have staked PIXL/ETH LP tokens - User A contributes 20K $PIXL/ETH and User B contributes 80K $PIXL/ETH - these users would share each block reward on a proportional basis ie User A recieves 20% and user B recieves 80% of each block reward over time
- Users can claim their rewards whenever they wanted - claimed rewards will be subject to a locking schedule based upon the block in which they choose to claim as detailed below
- the longer you wait to claim the higher the proportion of unlocked tokens recieved
- all locked $vPIXL tokens will begin converting to $PIXL at the end of the staking contract and vest linearly over 6 months following this
- At any point in time users can unstake their PIXL/ETH LP tokens from the staking protocol - all remaining accrued rewards will be claimed automatically at this point in time
- Users can then swap their PIXL/ETH LP tokens back to the liquidity pool for their share of the ETH/PIXL in the pool in return; users will also recieve a small percentage of trading fees generated within the pool
- If you redeem your LP token prior to your eight week time lock expiry you will be charged a tax and forfeit your claim of the exclusive glitch serum NFT
- If you have met the conditions of the time locked protocol you will be able to mint a free exclusive glitch serum (note: you will not need to unstake your LP tokens from the staking contract, you will be automatically rolled into the 'Normal LP Protocol' at this point in time)
An epoch is a unit of time that we have designated to be roughly two weeks long, but will vary slightly based upon the speed at which underlying blocks are mined on the Ethereum network.