Liquidity staking allows users to earn rewards by locking LP (liquidity provider) tokens after providing liquidity to a token pair. Rewards depend on:
- How much liquidity the user adds,
- How long it remains locked,
- Whether the user holds an eligible reward-boosting NFT.
1. Providing and Locking Liquidity
- Users deposit equal-value amounts of two tokens into a supported liquidity pool.
- In return, they receive LP tokens, which represent their share of the pool.
- These LP tokens are then locked for a set period to begin earning rewards.
- No rewards are earned without locking.
2. Reward Accumulation and Claiming
Rewards are based on:
- The amount of LP tokens locked.
- The length of time they’ve been staked.
- The reward rate defined for the pool.
Rewards accumulate over time but can only be claimed if:
- The lock period has ended.
- The pool allows withdrawals and reward claiming.
Users holding an eligible NFT multiplier will receive boosted rewards. The multiplier applies during reward claiming.
3. Withdrawing Liquidity
After the lock period ends (and if withdrawals are allowed), users can:
- Withdraw their LP tokens.
- Exit the liquidity program.
Withdrawals are not possible if:
- The lock period is still active.
- The pool has a temporary withdrawal lock.
Once unlocked, LP tokens are returned to the user, and the pool balance updates accordingly.
4. Reward Calculation Logic
Reward amounts depend on the following factors:
| Parameter | Description |
| Stake duration | How long the LP tokens have been locked |
| LP amount | Number of LP tokens locked |
| Reward rate | Rate assigned to the pool |
| Multiplier (NFT) | Multiplier from a qualifying NFT (if any) |
Basic Reward Formula:
Reward = (duration in seconds × LP tokens × reward rate) ÷ (1000 × 365 × 24 × 3600)
If the user holds a valid NFT, a multiplier is applied to increase the final reward.
Note: “LP tokens” in the formula refers to the number of LP tokens held by the user, not the original tokens in the pair.
FAQ — Liquidity Staking: What You Need to Know
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Q1: What is liquidity staking?
A1: Provide liquidity, get LP tokens, then lock them to earn rewards.
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Q2: When can I claim rewards?
A2: Only after the lock period ends and if the pool allows withdrawals.
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Q3: What is the NFT boost?
A3: A multiplier on rewards for holders of eligible NFTs.
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Q4: Can I withdraw LP tokens immediately?
A4: No, you must wait until your lock ends and any pool withdrawal lock is lifted.
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Q5: How are rewards calculated?
A5: Based on lock duration, amount staked, pool reward rate, and NFT boost (if any).
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Q6: What happens if I try to withdraw LP tokens before the lock period ends?
A6: Withdrawals are not allowed while the lock period is active or if the pool restricts withdrawals.
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Q7: How do I know which NFTs boost rewards?
A7: Pools or platforms usually provide a list of eligible NFTs and details about their bonuses.
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Q8: Can I add more LP tokens during an active lock period?
A8: It depends on the pool’s rules — some allow additional deposits, others do not.
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Q9: What happens to my rewards if I sell my NFT?
A9: The boost applies only while you hold the eligible NFT at the time rewards are calculated and paid.
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Q10: How often are rewards accrued and updated?
A10: Rewards typically accrue daily, but frequency may vary depending on the pool.
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Q11: Are there fees for withdrawing LP tokens?
A11: Fees depend on the platform and pool conditions — check the terms before participating.
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