Lorenzo recently announced a detailed incentive plan, inviting more users to explore the innovative and simplified BTC management and income mechanism of Lorenzo.
Lorenzo is committed to creating the first Bitcoin liquidity financial layer based on the Babylon ecosystem, providing a simple and smooth BTC asset liquidity pledging experience for cryptocurrency investors. Regardless of the amount held, users can easily pledge Bitcoin to obtain secure native pledging income, while also receiving diverse rewards and returns by participating in the Lorenzo DeFi ecosystem.
In order to promote ecosystem development, Lorenzo recently announced a detailed incentive plan, inviting more users to explore the innovative and simplified BTC management and income mechanism of Lorenzo.
Current User Participation Methods in Lorenzo
- Participate in Bitcoin pledging: Users pledge BTC or other BTC-wrapped assets (according to specific requirements of different Staking Plans) on the Lorenzo platform to receive the liquidity pledging tokens issued by Lorenzo;
- Participate in the Lorenzo DeFi Ecosystem: Users can choose to use the received stBTC (stBTC is the liquidity principal token in the liquidity pledging tokens issued by Lorenzo) to participate in various projects within the Lorenzo DeFi Ecosystem to obtain more incentives and income. This participation method provides users with the opportunity to receive additional incentives and maximize returns.
The key to these two opportunities lies in how Lorenzo tokenizes incentives.
Lorenzo Incentive Tokenization
Lorenzo's liquidity re-pledging token innovatively introduces the principal and interest separation mechanism, further building the Bitcoin liquidity finance.
https://x.com/LorenzoProtocol/status/1807782965251850360
Liquidity Principal Token (LPT)
LPT represents the right to retrieve the pledged Bitcoin principal after the pledging period ends. For example, if a user pledges 10 BTC into the pledging contract, the LPT they receive represents the right to retrieve these 10 BTC.
Official LPT as stBTC
There will be various LPTs in the Lorenzo ecosystem, and currently, the Lorenzo protocol designates stBTC as its official liquidity principal token (LPT), aiming to avoid liquidity fragmentation. stBTC is anchored 1:1 with the pledged Bitcoin, aggregating all pledged Bitcoin liquidity.
Yield Accumulation Token (YAT)
The Yield Accumulation Token (YAT) aims to incentivize users to participate in pledging and obtain stBTC. YAT represents the right to receive rewards at the end of the pledging period. Each YAT accumulates income from the re-pledging of Bitcoin.
As YATs can be freely traded, anyone holding YATs can use them in other DeFi applications.
Ecosystem Participation Rewards
The Lorenzo incentive plan consists of two key components: YATs and Points.
YATs (Yield Accumulation Tokens)
Purpose: Incentivize users to participate in the pledging plan.
Function: Represents the rewards that can be obtained at the end of the pledging period. YAT includes native rewards of the pledging plan and Lorenzo token airdrops.
Points (Lorenzo Points)
Purpose: Incentivize users to pledge and participate in the DeFi ecosystem.
Function: Mainly used for future project token airdrops and other scenarios.
Lorenzo Points System
Our points system aims to incentivize users to participate in pledging and use stBTC in various activities. Here is an overview of opportunities to earn points:
Base Points
Source: Participate in the pledging of BTC and other BTC-wrapped assets. The basic points rules may be adjusted at any time according to the activity arrangement, and we will promptly update you on any rule changes. Recent official activities include: Lorenzo Pre-Pledging Babylon Event.
Activity Guide
Activity Time: From 21:00 on May 27, 2024, Beijing time, until the Babylon mainnet launch or when the Lorenzo pledging pool reaches 250 BTC.
Pledging Reward: Users will receive 1,500 points for pledging 1 BTC per day.
Distribution Method:
- Lorenzo will allocate points proportionally based on the actual amount pledged by the user. For example, if a user pledges 1.2 BTC, they will receive 1,800 points on the second day (1,500 × 1.2);
- Lorenzo will allocate points based on the actual number of days participated. For example, if a user pledges 1.2 BTC for a total of 9 days, they will receive 16,200 points (1,500 × 1.2 × 9);
- According to the updated rules above, for users who participate for more than 20 days, Lorenzo will continue to allocate points at a rate of 1,500 points/BTC/day.
Note: For BTC in the pre-pledging pool, users can submit redemption applications after August 31, 2024.
Early Bird Points
Source: Participate in the Lorenzo LRZ Supporters and Lorenzo TVL Campaign waitlist
Distribution Method:
Lorenzo LRZ Supporter double points reward: Users will receive double points rewards within the first 7 days of the pledging taking effect.
Lorenzo TVL Campaign waitlist participants will receive multiple points rewards, with Lorenzo providing the following point multipliers within the first 7 days:
1) The first 100 pledgers: 5x points.
2) The first 1,000 pledgers: 2.5x points.
3) The first 10,000 pledgers: 1.25x points.
Note: The above early bird points apply to the pre-pledging Babylon event.
Project Points (Collaboration Points)
Source: Depending on the specific collaboration project, Lorenzo will allocate separate project points. Please refer to the official announcement for specific point arrangements.
Examples of projects:
Lorenzo will open an additional points pool for Babylon Pioneer NFT holders in the pre-pledging Babylon event, where holders will share an additional 5% of the total points pool;
Lorenzo will allocate a certain proportion of additional points for users introduced by collaboration projects such as Particle Network. Please refer to the official information for specific arrangements.
Campaign Bonus Points
Source: Lorenzo will hold joint events from time to time, and activity points will be used to incentivize stBTC holders who participate in DeFi activities using stBTC during the incentive period. Only stBTC TVL that contributes to its business goals will be included, and the points criteria for different projects may vary.
Notes:
- Specific points arrangements will be announced in the relevant activities;
- For all DeFi projects integrated with stBTC, Lorenzo will take multiple snapshots of the stBTC TVL of all ecosystem partners during special events;
- Each time a snapshot is taken, users who contribute stBTC to our ecosystem partners will receive points based on the total amount of stBTC contributed.
Community Points
Source: Users can earn points by actively participating in community activities and development. Please refer to the community announcement for specific community incentive points rules.
Other Points
For other points arrangements, please refer to the project announcement.
As of the release of this points plan, there are still some points from cooperative projects that have not been included in the user's points. Lorenzo will continue to follow up on the progress of relevant projects and update the community with information in a timely manner.
YAT Earnings Details:
YAT represents the basic interest earned by users who pledge, used to incentivize users to participate in pledging to obtain stBTC. Please note that all BTC and other BTC-wrapped assets received by Lorenzo (according to specific requirements of different Staking Plans) will be pledged by Lorenzo agents for Babylon as soon as it goes live. The actual pledging progress may be determined by the possible pledging limit of Babylon. Pledgers will receive an equivalent amount of stBTC to the pledged BTC.
The first BTC pledging activity that users can participate in is: Lorenzo Pre-Pledging Babylon Event. This incentive will be composed of YAT earnings and the above-mentioned points system. The following is an explanation of the YAT related to this activity:
- Please note that the official Dapp displays the yield as an annualized yield;
- The Babylon pre-launch pledging activity will set a limit of 250 BTC;
- YAT earnings will be distributed based on the proportion of the user's pledged amount;
- Lorenzo will provide a YAT earnings adjustment to a value equivalent to $1.5 million for the final successful pledging users, composed of Babylon's native pledging income and Lorenzo token airdrops;
- The calculation method for the yield rate is as follows: Expected $1.5 million equivalent airdrop divided by the current total locked BTC in the pre-pledging pool;
- For BTC in the pre-pledging pool, users can submit redemption applications after August 31, 2024. Please note that if the Babylon mainnet goes live before this date, Lorenzo will pledge on behalf of the users, and the pledging period for BTC locked in Babylon will be subject to Babylon mainnet rules.
FAQs
Q1: What are the specific components of the earnings for pledgers?
Pledgers' earnings consist of two parts:
- YAT corresponding to pledging interest: The basic interest earned by users who pledge, i.e., YAT (Yield Accrued Token);
- Points rewards: In addition to the basic interest, users will also receive additional points rewards for pledging. In addition, the stBTC obtained through pledging can also be used to participate in DeFi activities, thereby obtaining more diverse incentives and earnings.
Q2: If stBTC is cross-chained to participate in DeFi in other ecosystems, will the pledging points disappear?
Pledging points will not disappear because pledging points are associated with the EVM address at the time of pledging.
Q3: If stBTC is sold, will the pledging earnings and points disappear?
Points will not disappear because pledging points are associated with the EVM address at the time of pledging; earnings are associated with YAT and are not affected by the sale of stBTC.
Q4: Will there be pledging earnings and points for purchasing stBTC on the secondary market?
There will be no pledging earnings and points for purchasing stBTC on the secondary market. YAT and the points system are essentially designed to incentivize users to pledge and generate stBTC to participate in the DeFi ecosystem.
Q5. After withdrawal, will there still be interest and points generated when users withdraw stBTC?
After users withdraw stBTC, no new interest and points will be generated. Users can exchange the interest tokens provided by the project with the accumulated YAT. The exchange quantity depends on the proportion of YAT held by the user and the total number of interest tokens provided by the project. To generate new interest, users need to pledge BTC again (Lorenzo also plans to launch an automatic stBTC reinvestment plan in the future to simplify the process of re-pledging for users).
Q6: What are the advantages for early participants?
Base points: Early participants can reach the base points more quickly. After reaching the base points, users will continue to receive point bonuses designed based on time weighting.
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