Ethereum LP Staking
Please note that Ethereum LP Staking program ended on October 23rd, 2021.

What is LP Staking?

Whenever liquidity is deposited into an AMM pool, specific tokens known as liquidity providers tokens (LP tokens) are minted and sent to the providerโ€™s address. The proportion of the poolโ€™s liquidity provided determines the number of liquidity tokens the provider receives. A liquidity pool is a core mechanism of AMM (Automated Market Makers), where at least two assets are deposited to form a trading pair.
By staking your LP tokens into the Idle LP Staking Program, users are entitled to receive additional rewards in the form of $IDLE.

LP Staking Program Rationale

LP staking is a way to incentivize liquidity provisioning for IDLE/ETH pairs on decentralized exchanges. The Idle Governance extensively discussed this reward mechanism and executed IIP-6 to let the Pilot League deploy the staking contracts. Idle Governance launched an LP staking program to reward liquidity providers and enable LPs to become part of the Idle ecosystem.

Program Outline

๐Ÿ“… Start date: April 26, 2021
๐Ÿ“… End date: October 23rd, 2021 (6 months)
๐Ÿ’ผ Program budget: 180,000 $IDLE
๐Ÿ”€ Staking model: Ampleforth Geyser model forkโ€‹
๐Ÿ›  Solidity code: Idle Geyser Githubโ€‹
โ›“ Contract addresses: TokenGeyser, Tokenizerโ€‹

How LP staking works

  1. 1.
    Deposit WETH and IDLE into IDLE-WETH SushiSwap poolโ€‹
  2. 2.
    Receive SUSHI LP tokens
  3. 3.
    Stake SUSHI LP tokens in the Idle staking page, and monitor stats and accrued tokens
  4. 4.
    Withdraw your SUSHI LP tokens anytime and get your IDLE rewards

Time-Weighted Distribution Mechanism

The Geyser contract has a built-in mechanism intended to incentivize long-term liquidity providers. While there are no hard lockups for staking, there is a benefit to keeping your staked position longer.
The reward multiplier linearly increases over the following periods:
  • 0-2 months --> from 1x up to 2x
  • 2-4 months --> from 2x up to 3x
  • 4-6 months --> 3x
By holding the funds in the staking contract until the final rewarding block, LPs will receive the token bonuses not accrued by LPs that withdrew funds earlier.
User A, B, and C join the LP staking at the program launch and with the same stake. - User A withdraws funds in the third month, receiving a 2.5x multiplier. - User B and C hold the deposit until the end: on top of their multiplier (3x), they will split the 0.5x bonus (referred to 3 months) left by user A according to their pool weights. The final multiplier will be 3.125x per user.


#Who holds the funds?

SushiSwap smart contracts hold IDLE and WETH funds, and LP tokens are deposited into Idle protocolโ€™s smart contracts. The address that you used to deposit LP tokens is the only one entitled to withdraw the funds. The original Ampleforth geyser contracts were audited by CertiK.

#How does the process work from a technical perspective?

The end-end flow for staking is:
  • Sushi LP Token (SLP) โ†’ SLP token staked in Tokenizer, wrapped Idle Sushi LP (wiSLP) token minted โ†’ wiSLP token is staked in IdleGeyser contract, accumulating IDLE rewards based on time-weighted multiplier
The end-end flow for unstaking is:
  • wiSLP token unstaked from geyser โ†’ IDLE rewards sent to user (based on time-weighted multiplier) โ†’ wiSLP token burned, SLP token unstaked from Tokenized and sent back to user
This process has been automated in Idle dashboard, so as a user you wonโ€™t have to worry about this detail.

#How do you increase the multiplier?

The longer you provide liquidity, the higher is the multiplier (up to x3).

#Would I farm $SUSHI tokens too?

No, the Idle Governance voted to allocate accrued $SUSHI to Idle protocol for treasury management. This has been voted by Idle community here.

#Do I still receive my SushiSwap LP trading fees?

Yes, trading fees are accrued via SLP tokens, and you will receive your % fee share when you withdraw assets from the SushiSwap pool.

#Can I redeem LP tokens and then deposit them again?

Yes, you can deposit and redeem how many times you wish, but your multiplier would restart from 1x.

#What are the costs associated with staking? (deposit and withdrawal network fees)

According to our estimates, the stake action would require around 500k gas and the unstake transaction should cost approximately 300k gas. You can compute the total ETH cost using ETH Gas Station tool. There are no fees charged by Idle protocol for these operations.

#Are rewards vested?

No, there is no vesting period

#Is LP staking available only for SushiSwap? And which pairs are incentivized?

Yes, the Idle Governance voted to incentivize only SushiSwap IDLE-WETH pool.

#Who is the owner of the LP staking contracts?

The current owner of the LP staking contracts is the Pilot League multisigโ€‹
Last modified 27d ago