LP Finance Development Report (Week I)

LP Finance
3 min readNov 29, 2022

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As promised in the community, LP Finance would be posting a development report weekly on Medium. This post is intended to provide information on the development progress to LP Finance stakeholders.

zSOL Program Maintenance

zSOL program deployment has been delayed until notice due to multiple factors. LP Finance has monitored DeFi protocols during the FTX incident where liquidity on Solana got thin, lending and stablecoin issuance protocols experienced bad debts and oracles were not able to report properly, which blocked transactions to go through. Additonally, mSOL and stSOL (LSDs) fell below SOL price, which gave a really hard time for many protocols on Solana that believed this would not happen.

After watching the event in real-time, LP Finance has decided to fix and upgrade certain parts of zSOL program to be vulnerable on most events. The changes are as follows.

  • Update mSOL & stSOL oracle to unstaking exchange rate
  • Remove low liquidity token (SAMO)
  • Replace UXD with USDC (UXD is now backed by USDC)
  • Apply lower USDC deposit cap
  • Remove Typeless Repayment

With these updates, zSOL logic would be simplified and attack vectors would be reduced. Keep in mind that security should not be overlooked at this period where anything might happen.

xLPFi Governance Program

LP Finance has decided to launch xGovernance, where users can burn LPFi to mint xLPFi, which is a governance token. LPFi and xLPFi are two different parties in LP Finance.

LPFi is a token that earns protocol revenue, but giving up governance rights. Initially, LPFi staking pool would earn 100% of protocol revenue, but could be updated in the future by xLPFi Governance.

xLPFi is a token that has a right to parcitipate in governance. Users should burn LPFi to mint xLPFi but cannot redeem LPFi. xLPFi can be staked in xLPFi staking pool to earn “LPFi” emissions. LPFi emission is set to 30,000 LPFi/year for 5 years. Emission after this period would be determined via governance.

xLPFi holds a strong power over LP Finance as following parameters could be changed.

In order to prevent a complete value transfer to xLPFi, LPFi-xLPFi liquidity pool would be provided at a limited amount (63,000 LPFi & xLPFi). Further on, the risk that xLPFi holds would increase.

Details can be found here.

Conclusion

LP Finance team is actively pushing development process to make LP Finance succesful in a long term.

We are aware that token price might not act as investors expected due to major unlocks and delayed launch, but track our development process to determine or evaluate the value. Thanks!

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