WispSwap is a decentralized exchange and DeFi platform that offers a suite of financial products including trading, lending, farming, staking, prediction markets and Launchpad, making it a one-stop shop for DeFi users.To enhance the farming experience for Liquidity Providers (LPs), WispSwap has implemented a new feature called spNFT, which represents liquidity providing positions in the form of NFTs, which can be transferred and traded
The spNFT was designed with key principles in mind, including a high degree of flexibility and customization, transaction efficiency optimized for users, and supporting the evolution of the protocol by adapting to their needs. In the DeFi space, agricultural emissions and distribution are often the breaking point for many projects. WispSwap’s spNFT aims to find the right balance between satisfactory yields for liquidity providers and avoiding token holder dilution, while promoting the long-term growth of the platform.
In today’s fast-growing DeFi landscape, the MasterChef model pioneered by SushiSwap has been widely adopted and has proven to be a popular way for users to earn rewards by providing liquidity to various protocols. However, one limitation of this approach to liquidity incentives is that it provides the same level of rewards to every LP regardless of their level of commitment, whether they are short-term farmers or dedicated long-term users. To address this, the spNFTs mechanism is designed to provide appropriate incentives based on each LP’s long-term dedication, thereby promoting a sustainable and fair farming experience.
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When users enter liquidity supply positions by providing liquidity to WispSwap DEX, they can mint spNFTs by wrapping their positions into WispSwap’s NFT Wrapper. This spNFT acts as a transferable deposit receipt and is the only thing that allows users to withdraw their attached funds, no matter who the original depositor is. Additionally, spNFTs feature a yield rate and automatically generate rewards when the LPs it wraps have been configured to receive WispSwap incentives in the form of WISP and veWISP tokens. spNFT also has a locking function, which can lock positions for any length of time at any time, and users who lock profit positions will receive bonuses in proportion.
It is worth noting that spNFTs can still be transferred and traded on the NFT market even if the liquidity supply position is locked. Additionally, these NFTs can be used as collateral on the WispSwap lending protocol with favorable loan-to-value ratios (LTV), making it easier for spNFT holders to obtain liquidity without selling their spNFTs or closing their liquidity supply positions. This provides additional flexibility and convenience to LPs who may need short-term liquidity while still maintaining their long-term agricultural positions.
Each spNFT has its own attributes such as depositing LP tokens, number of tokens, APY, multiplier information, optional lock settings and all interactions required by its owner to manage it easily. They can be freely split, merged, recharged, transferred, etc. The spNFTs Wrapper is also a completely permissionless functional layer, which means that anyone can wrap any asset in a spNFT, and any protocol can utilize this stack, even if it is not directly incentivized by WispSwap, it is free to integrate it into its own incentive layer.
The design of spNFTs makes other uses particularly easy to implement, including their potential use as collateral. With its complete and secure codebase designed to simplify integration and interaction with smart contracts created to use these spNFTs, spNFTs are expected to significantly change the face of staking and liquidity incentives for Defi protocols in the Sui ecosystem.