[7] Sleeping LP Tokens

Time-locked Liquidity for Ouronet SWP-Pairs

Example Link: Z|P|OURO-VST|LP-98c486052a51

1. Purpose and Functionality

Sleeping LP Tokens provide a time-based locking mechanism for liquidity, enabling SWP-Pair Owners to implement deferred liquidity while maintaining flexibility. This mechanism allows users to time-lock LP Tokens within a liquidity pool, with the option to recover their liquidity at a later date, after a specified maturity period. The Sleeping LP Token functions similarly to the Sleeping Token mechanism used for individual tokens but extends it to liquidity pools, ensuring that liquidity can be "put to sleep" for a given time period, during which no liquidity withdrawal is possible.

By utilizing Sleeping LP Tokens, SWP-Pair Owners and liquidity providers can:

  • Defer liquidity access to align with strategic goals, such as managing liquidity over time or ensuring long-term participation.

  • Guarantee liquidity is locked for a set period to prevent short-term liquidity fluctuations, stabilizing the pool and its assets.

2. How Sleeping LP Tokens Are Created

Once a Sleeping Link is established for an LP Token within a SWP-Pair, the following steps occur:

  1. User Sleeps their LP Token: Users holding an LP Token within the SWP-Pair may choose to put it to sleep by interacting with the Sleeping Link. The LP Token is sent to the Vesting Smart Ouronet Account, where it is time-locked.

  2. Sleeping LP Token Creation: After the LP Token is "put to sleep," a Sleeping LP Token is minted and issued to the user. The Sleeping LP Token contains embedded metadata defining the maturity date—the exact timestamp when the LP Token can be redeemed.

  3. Optional Pool Configuration: The SWP-Pair Owner may configure the liquidity pool to allow the addition of Sleeping Tokens. If enabled, users can contribute Sleeping LP Tokens to the pool, effectively adding time-locked liquidity to the pool.

    • Example: If the pair is P|OURO-98c486052a51|VST-98c486052a51, users can sleep their VST-98c486052a51 LP Token, provided a Sleeping Link is configured for the token. However, if no Sleeping counterpart exists for OURO, only F|VST may be used in this manner.

    • If the pool is configured to accept Sleeping Tokens, liquidity can be added using Sleeping Tokens, and the resulted liquidity becomes time-locked.

3. Integration with Sleeping Token Liquidity Pools

When the Sleeping Token mechanism is integrated into the liquidity pool:

  • Users may sleep their LP Tokens by interacting with the Sleeping Link.

  • The SWP-Pair Owner can enable the use of Sleeping Tokens for liquidity provisioning, ensuring that liquidity providers can use Sleeping Tokens to add Liquidity.

  • Once Sleeping LP Tokens are added to the pool, the resulted liquidity becomes time-locked. The original assets are only accessible after the maturity date is reached, not through withdrawal.

4. Liquidity Process Overview

When Sleeping Tokens are used for liquidity, the following sequence of events unfolds, all in an automatic manner:

  1. Sleeping Token Burn: The user's Sleeping Token (e.g., S|VST-Q3X8L2RRNWfk) gets burned.

  2. Custodial Recovery: The original DPTF Token (e.g., VST-98c486052a51) is retrieved from the Vesting Smart Ouronet Account in an immediate manner.

  3. Liquidity Injection: The recovered original token is paired with its SWP counterpart (e.g., OURO) to add liquidity to the SWP-Pair.

  4. Sleeping LP: The resulting Native LP Token is then automatically "put to sleep" (held in custody by the Vesting Smart Ouronet Account) effectively locking the liquidity in the pool for the "sleeping-period". The user receives the Sleeping LP Token in return, which represents their time-locked liquidity.

  5. Once the "sleeping-period" elapses for the LP, the user may retrieve the native LP by culling the Sleeping LP, just as one would with a sleeping Token.

5. Benefits of Sleeping LP Tokens

Feature
Benefit

⏳ Time-Locked Liquidity

Liquidity is locked for a specified period and can’t be withdrawn early.

🌱 Long-Term Stability

Ensures stable liquidity over time, preventing fluctuations in the pool.

🔄 Deferred Liquidity Access

Liquidity is released at a later date, offering control over the timing of access.

🏗️ Enhanced Pool Liquidity

Allows SWP-Pairs to hold long-term, time-locked liquidity, promoting healthier pools.

🚀 Incentivized Participation

Users can earn rewards or gain preferential access after the time-lock expires.

6. Key Characteristics of Sleeping LP Tokens

Attribute
Description

⏳ Time-Locked

The liquidity is locked for a set period until the maturity date is reached.

🔒 Non-Withdrawable

Liquidity cannot be accessed until the lock period ends.

🔄 Flexible Pool Configuration

SWP-Pair owners can choose whether to accept Sleeping Tokens for liquidity provision.

📅 Maturity Date Defined

Each Sleeping LP Token has a precise maturity date embedded in the metadata.

🧑‍🤝‍🧑 Permanent Custody

The Vesting Smart Ouronet Account holds the time-locked liquidity permanently.

7. Visual Lifecycle Summary

  1. User holds an LP Token of a given SWP-Pair.

  2. User decides to sleep the LP Token by interacting with the Sleeping Link.

  3. The native LP Token is sent to the Vesting Smart Ouronet Account for safekeeping.

  4. A Sleeping LP Token is minted and issued to the user, with a maturity date defined.

  5. Once the maturity date is reached, the user can cull the Sleeping LP Token to recover the original LP Token.

This Sleeping LP Token mechanism ensures that liquidity can be strategically deferred, providing long-term stability and control within liquidity pools while preserving the flexibility of token management.

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