pLP Overview
Prime Liquidity Provider (pLP)
What is it?
Liquidity pools are fundamental to many DeFi protocols, enabling users to contribute liquidity in the form of paired assets (such as PRFI & HYPE) in exchange for a share of the pool’s potential yield. pLP tokens can be locked through the protocol to activate PRFI emissions in the money market, and receive protocol revenue.
How it works?
Example 1: Depositing $100,000 USDT without any locked pLP tokens earns you the basic APY but doesn't qualify for additional PRFI emissions.
Example 2: Deposit $10,000 USDT and lock $500 in pLP tokens to meet the 5% threshold, making you eligible for PRFI emissions.
The requirement to lock liquidity tokens in pLP form benefits the PrimeFi money market in several ways:
Long-Term Participation: Locking pLP tokens commits users to a specific period, increasing the likelihood of them maintaining their deposited collateral.
PRFI Emissions Activation: This commitment enables PRFI emissions, rewarding those invested in the protocol's long-term vision.
Attracting New Users: These dynamics enhance the PrimeFi money market's appeal to potential liquidity providers, fostering growth and development.
This strategic cycle not only sustains long-term liquidity but also attracts new inflows, creating a mutually beneficial scenario for individual users and the protocol as a whole.
Below, you can see natural market rates highlighted in red, and PRFI emissions directly underneath, in blue/purple. Users that simply deposit but don't add value to the protocol will continue to earn natural market rates, but will not be eligible for PRFI emissions.
In order to initiate PRFI emissions for both deposits and loans, you must lock a minimum of 5% of your deposit's USD value in pLP tokens.
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