LPFi Staking (Preferred Shares)

Users can earn protocol revenue via staking LPFi.

Revenue Sharing

LPFi can be staked to earn protocol revenue. The protocol revenue would consist of

• Collateral Deposit Fee

• PSM Swap Fee

• zSOL LP Deposit Fee

• 10% of zSOL Stability Fee

• zSOL Treasury Staking Revenue

Initially, revenue that compounds (PSM Swap Fee, zSOL Treasury Staking Revenue) would remain untouched to encourage growth.

Collateral deposit fee, zSOL LP deposit fee, and 10% of zSOL stability fee would be redeemed every last day of the month and provided to LPFi staking pool for a month. As the total reward amount differs monthly, estimated APR might be volatile.

20% of protocol revenue would be directed to LP Finance Inc. , a maintainer of LP Finance protocol.

Unstaking Fee

In order to prevent short-term holders from earning revenue and purely rewarding long-term holders, unstaking penalty exists.

Staked Period	Unstaking Fee
staking period < 7 days	10%
7 days<= staking period < 14 days	5%
14 days<= staking period	0%

Unstaking penalty is burnt immediately when unstaked. For example, if you staked 100 LPFi but unstaked it in 2 days, you would be able to redeem 90 LPFi and 10 LPFi would be burnt.

After staking, if the user stakes or unstakes, the period is reset to 0 days.

This mechanism concentrates rewards on long-term holders, which would result in higher incentives.