Staking and xOLE
xOLE is the governance token for OpenLeverage. Users receive xOLE as a receipt for providing OLE-BUSD liquidity on a designated partner DEX and subsequently staking their LP tokens on OpenLeverage into a time-escrowed contract.
Users may choose to lock their LP tokens for a minimum period of two weeks up to four years. Users who lock for the maximum duration (4 years) will receive 436% xOLE compared to those who lock for the minimal duration (2 weeks).
xOLE encourages active liquidity provisioning for OLE and directly aligns token holders with the protocol’s interest over a longer time horizon.
xOLE holders will get the following benefits and privileges:
- Receive 30% of generated trading fees from the epoch, and $100,000 extra for the first epoch. The accumulated fees will buy OLE from the open market for the 7 days after the end of each epoch, then distribute equally to xOLE holders.
- Receive more OLE tokens, further increasing the field for LP locking.
- Up to 20% earning boost on your lending and trading according to the LP value locked and the time left to unlock.
- Participate in governance for incentive distribution, so you can vote for your favorite pairs to enjoy OLE rewards.
xOLE is calculated based on the LP amount and lock duration. With more LP locked for a longer duration, more xOLE can be earned. The following formula is used to calculate xOLE:
Staking and fee rewards are distributed to users who stake assets on OpenLeverage based on a combination of xOLE amount and lock duration. The following formula is used to calculate staking rewards and sharing fees:
Staking and fee rewards will stop calculating when the locked duration expires. To continue staking for rewards, users must restake by locking in their OLE-BUSD LP.
Users can get up to a 20% earning boost on their lending and trading, according to the LP value locked and the time left to unlock.
xOLE holders will be eligible to participate in regular epoch voting rounds to determine lending and trading rewards for individual token pairs that meet certain eligibility criteria. Up to 47% of the total OLE supply, or 470 million tokens, have been designated to the OpenLeverage DAO fund which will continuously provide liquidity incentives.
The votes for each epoch will be taken using Snapshot, an off-chain, gasless platform, and will be reset every epoch, lasting approximately 21 days. The OLE tokens used to incentivize each token pairing will be split 30/70, with 30% of OLE going towards lending activity and 70% towards trading activity. The reward split between trading and lending can also be decided by the governance process.
Fees reward distributed from staking is a combination of initial fees and actual fees generated in the current epoch. The fees for each epoch will be allocated 10% to the next epoch as the initial fees of staking.
The formula for initial fees APY is calculated below:
In addition, the APY calculation for actual fees generated in the current epoch is shown below:
Therefore, the fees reward APY is:
$100,000 in transaction fee rewards is distributed to Epoch 1 stakers, so Epoch 2 has an initial trading fee reward of $10,000 and has generated $20,000 in transaction fees in 5 days. The Total Staked LP Value is $1,000,000.
According to the above formula:
Initial fees APY = 100,000 * 0.1 * 0.9 / 21 * 365 / 1,000,000 = 15.64%
Fees generated APY = 20,000 / 5 * 365 / 1,000,000 = 146%
Fees reward APY = 161.64%