LP Rewards & Maturity

While LPs can claim their principal at any time, rewards can only be redeemed once the Farm’s strategy terms are met or reach maturity. Maturity periods are typically defined by the farm owners. At the time of Farm’s Token purchase, a portion of the future yield at maturity is provided to the LP as an immediate reward. While locking assets, certain strategies will offer LP's the option to choose maturity periods, which can range from a few months to several years, depending on the specifics of the associated strategy.

At the time of deposit, LPs receive an immediate bonus in $DXP tokens representing a portion of the future yield. This upfront reward not only provides early value but also serves as a stake in the overall performance of the strategy. Depending on the chosen maturity period—ranging from a few months to several years—LPs have the flexibility to decide how to redeem their yield.

Upon reaching maturity, LPs face a strategic choice:

• They may retain their initially awarded $DXP tokens and claim the yield difference in the underlying asset, or

• They can return the same amount of $DXP tokens to receive the full yield in the underlying asset. For early withdrawals, LPs must return the initial $DXP rewards in order to unlock their principal. This mechanism not only incentivizes longer-term participation but also ensures that any rewards distributed prematurely are recycled back into the unissued supply.

For example, the protocol enforces principal redemption with the following logic:

// In redeemPrincipal(), LPs must burn claim tokens to unlock their deposited principal:
require(claimToken.balanceOf(msg.sender) >= amount, "Insufficient claim token balance");
claimToken.burnFrom(msg.sender, amount);

This framework ensures that LP rewards are closely tied to the strategy’s performance and maturity, creating a balanced and sustainable incentive structure for all participants.

This strategy allows LPs to either take the underlying token rewards upon maturity or retain the $DXP tokens given to them earlier, a decision that can be made anytime until maturity or principal claim. Once the maturity period is over they will receive their remaining $DXP rewards and get their principle back.