🎓 Concepts
💉 Boosting

💉 Boosting: What does that mean ?

🤔 What it is ?

By locking your tokens for a certain amount of time, you can increase your benefits, which is what "boosting" means in practice.

📐 Global formula

The formula, which is utilized by both Curve and Stake DAO (for the veSDT), is as follows:

min(Dollar Provided×40100+Total Liquidity×Voting BalanceVoting Total×60100,Dollar provided)\text{{min}}(\text{{Dollar Provided}} \times \frac{{\text{{40}}}}{{\text{{100}}}} + \text{{Total Liquidity}} \times \frac{{\text{{Voting Balance}}}}{{\text{{Voting Total}}}} \times \frac{{\text{{60}}}}{{\text{{100}}}} , \text{{Dollar provided}})

To understand the formula better, let's break it down:

  1. The formula calculates two values and selects the smaller one.
  2. The first value is derived from two components:
    • 40% of the dollar amount you've provided.
    • 60% of the total liquidity, adjusted by your share of the total votes. Your share is calculated as your voting balance divided by the total votes.
  3. The second value is straightforward - it's the dollar amount you've provided.

🌐 Curve Case

Assuming you've already read about voting escrow, let's explore one of its benefits. In the case of Curve, holding veCRV allows you to boost your CRV rewards (as long as you also provided liquidity), up to x2.5.

Please note that the amount of veCRV required for boosting can vary across different liquidity pools (opens in a new tab), depending on the existing liquidity (as seen on the formula above).

🎯 Application in Stake DAO

The ability to boost rewards becomes a valuable asset, especially for liquidity providers. This concept is central to the Liquid Lockers and Liquid Lockers strategies of Stake DAO.

With this in mind, if boosting is mutualized (through the Liquid Lockers), it can act as a "router" for deposits into the underlying LP, resulting in boosted rewards that are redistributed to users via Stake DAO.

The formula of that boost is also applied for the veSDT token.