Liquidity Provisioning

Overview

LPs can provide liquidity to the VLL for supporting chain abstracted transactions and earn yield generated through VLL transaction fees. Yield earned on top of delegated liquidity (via chain abstracted transaction fees) is split between the LP, solver and protocol. The LP receives at least 30% of the profit, solver receives at least 20% of the profit and the protocol receives at most 50% of the profit. Protocol fee varies to incentivize coordination and desired activity from VLL participants (LPs and solvers).

edToken

edTokens (Enclave Delegated Tokens) represent shares of ownership in the liquidity accessible to solvers to power user transactions through the VLL. Users may mint or redeem edTokens in exchange for underlying tokens on any supported network of the VLL.

edTokens are not rebase tokens and not 1:1 redeemable for underlying token. Rather they represent shares in the aggregated liquidity pool of the underlying token across all supported networks. The number of underlying tokens redeemable for a single edToken increases as more yield is generated from chain abstracted transactions for the underlying token through the VLL.

edTokens are omnichain tokens and conform to the xERC20 standard and can be transferred as any other ERC20 token would or bridged across networks, to any supported network of the VLL.

Lifecycle

Staking

LPs deposit token in exchange for edToken. edToken holders unlike virtual liquidity users do not get the benefits of chain abstracted transactions. Instead edToken holder earn yield on their deposits.

Unstaking

LPs can choose to redeem the underlying token in exchange for their edTokens. LPs have the option to choose where they would like to receive their underlying tokens. When LPs redeem edTokens their edToken balance is burned.

Delegating

Existing users that maintain balance of a given token (ex. USDC) in the VLL for chain abstracted transactions may choose to become LPs by delegating their virtual token balance. This can be done by calling a special delegate function to convert a specified amount from their virtual token balance into edTokens. Once users delegate their tokens their virtual balance is reduced porportionately.