💎Staked Positions (spNFT)

What are staked position NFTs (spNFTs)? All Hercules LPs are granted the ability to wrap their staked positions. When these staked positions are wrapped, an “spNFT” is automatically minted. This newly minted spNFT acts as a type of “deposit receipt” confirming the user’s new staking position in the corresponding NFT pool contract. Because the spNFT doubles as the official deposit receipt for the pool contract, users MUST use their spNFT to withdraw their corresponding funds. In other words, the owner of the spNFT is also the owner of the corresponding LP rewards.

The most exciting thing about spNFTs is that they are more than just deposit receipts. spNFTs replace and innovate beyond the traditional farming system of other DeFi protocols by earning you trading fees and farm incentives, while also granting you access to a plethora of other yield reward campaigns within the Hercules ecosystem!

Properties:

Every staked position (spNFT) has the following basic information:

• A unique ID

• A deposit LP token

• A deposit LP token amount

• An APY

• Optional lock settings (duration, start/end time)

• Multipliers information

Ways to manage your spNFT

spNFT configuration options:

• Basic utilities (deposit, withdraw, harvest)

• Adjusting locks

• Boost and un-boost staked positions (spNFT)

• Transfer your staked position to another wallet address

• Split staked position

• Merge staked positions

Locks

When creating a position, you can specify a lock duration, making it impossible to withdraw from the spNFT until the lock period ends.

Every wrapped Hercules LP has its own lock settings (max lock duration, and its matching max lock multiplier).

By specifying a lock setting, users can earn a yield bonus based on the multiplier accompanying the lock and if the position's LP is incentivized. Locks can also be a needed requirement to have the right to stake on a Nitro Pool.

APY

Every yield-bearing spNFT will have its own APY, based on:

• The allocation set by the Master to the wrapped LP

• The lock multiplier

• The YieldBooster multiplier

Yield Farming:

Staked positions in the form of spNFTs offer diverse applications, with a primary initial goal of replacing traditional yield farming mechanisms by earning Hercules incentives.

Yield-bearing NFTs

From a user's perspective, the mechanics of our staked positions mechanism have a lot of similarities with traditional DeFi farms. One key difference however is that Instead of allocating rewards to regular farms, the Hercules Master contract distributes incentives to all the staking positions of team-defined selected wrapped LPs.

Please note: This means users will only receive rewards for positions that have incentives earmarked for those assets.

Once a staked position's LP belongs to any of the incentivized listed pairs, the spNFT will immediately start generating yield with rewards from the Master. This operation occurs similarly when staking into a regular farm.

Rewards

The Hercules incentivization model runs in the form of a dual-token rewards model. All eligible wrapped Hercules LPs will have their matching staked positions rewarded in both TORCH and xTORCH

The share of both rewards varies depending on the asset. The default reward scheme with a default set to 80% xTORCH/ 20% TORCH.

Yield multipliers

There are two ways to boost rewards from yield-generating staked positions. This can be done either through locks or through the Yield Booster plugin.

Both values will vary depending on the staked asset, from 0% to 150% (x1 to x2.5), but will usually be set to their default 100% (x2).

The sum of those two multipliers is used to determine the total multiplier of the position. Every pool will have its own maximum boost, with a 200% (x3) default cap and an absolute cap of 250% (x3.5).

Advantages & Extensions:

spNFTs introduce additional features and offer new opportunities and potential extensions:

Feature layer

Staked positions serve as a "wrapping layer" on LP tokens, allowing any liquidity or single asset to be locked automatically without manual intervention. Nearly any protocol can take advantage of this mechanic whether they are listed on Hercules or not. With this tech stack, protocols can add locks to their liquidity, along with their own incentive layer (such as a nitro pool).

Custom strategies

Users can create advanced custom strategies with unlimited staked positions for the same LP, using different amounts, lock settings, or boost mechanics.

Re-usability & capital efficiency

Liquidity providers achieve greater capital efficiency by holding a receipt of their deposits, which can be reused to generate additional rewards.