Esper LP NFT (spNFTs)
NFT-based LP Token
What is spNFT?
Drawing inspiration from Camelot's Staked Positions (spNFTs), each LP in Esper Finance possesses unique staking positions (spNFTs), which can be minted by users through wrapping LP tokens. When a position is established, the deposit is traded for a staking position NFT at a corresponding NFTPool contract, serving as a deposit receipt.
These receipts uniquely allow users to withdraw the corresponding funds, making the owner of an spNFTs the de-facto owner of the linked LPs, irrespective of the original depositor. However, staked positions offer more than mere deposit confirmation—they replace the traditional yield-generating farms prevalent in most DeFi protocols, additionally functioning as an extended feature layer that opens up endless opportunities and potential expansions.
Yield farming with spNFT
Although staked positions in the form of spNFTs have a broad spectrum of applications, one of their primary initial functions will be to substitute traditional yield farming methods by accommodating incentives from Esper Finance.
Yield-bearing NFTs
For users, the mechanics of Esper Finance resemble traditional DeFi farming. But instead of distributing rewards to typical farms, the Esper Finance Master contract directs incentives to all staking positions of selected, team-defined wrapped LPs. Once a staked position's LP aligns with these chosen pairs, the corresponding spNFT generates yield from the Master's rewards, functioning as if the owners were participating in conventional farming.
Rewards
Esper Finance incentives come in the form of dual rewards: the qualifying wrapped Esper Finance LPs will have their associated staked positions receive both ESPER and xESPER.
Both rewards' proportions fluctuate based on the asset, with a default ratio set at 80% xESPER and 20% ESPER.
Locks
When you create a position for an spNFT, you have the option to specify a lock duration (No lock is also an option). This lock duration determines the length of time during which you cannot withdraw any assets from the spNFT. Each wrapped Esper LP has unique lock settings, including a maximum lock duration and a corresponding maximum lock multiplier.
The lock duration offers a yield bonus based on the maximum lock multiplier if the LP position is incentivized. This yield bonus is calculated linearly, meaning it increases proportionally with the duration of the lock and the maximum lock multiplier.
Yield Multipliers
There are two primary strategies to enhance returns from yield-generating staked positions:
1. Timed lock
When you create a position for an spNFT, you have the option to specify a lock duration (No lock is also an option). This lock duration determines the length of time during which you cannot withdraw any assets from the spNFT. Each wrapped Esper LP has unique lock settings, including a maximum lock duration and a corresponding maximum lock multiplier.
The lock duration offers a yield bonus based on the maximum lock multiplier if the LP position is incentivized. This yield bonus is calculated linearly, meaning it increases proportionally with the duration of the lock and the maximum lock multiplier.
These multipliers will fluctuate based on the staked asset, ranging from 0% to 150% (equating to x1 to x2.5), although typically, they will default to 100% (x2). The sum of these two multipliers determines the total multiplier of the position. Each pool comes with its own maximum boost, defaulting at 200% (x3), and an absolute cap of 250% (x3.5).
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