Hummus Releases Locking
The Great Hummus Invents Time Machine
TL;DR
- Users can choose to lock or flexibly stake HUM tokens to generate veHUM.
- HUM can be locked for up to one year for a maximum veHUM accrual of 120x HUM locked.
- To reward our long-time users who are staking flexibly, we are raising the maximum veHUM accrual from 100x to 180x the amount of stake HUM tokens.
- Without staking HUM, a liquidity provider still receives the base APR.
- Staking HUM, but not locking, a liquidity provider receives the base APR plus their boosted APR.
- Locking HUM, a liquidity provider receives the base APR plus their maximum boosted APR.
- veHUM holders continue to earn protocol fees and Metis rewards.
- If you wish to lock but have already staked, you will have to unstake first. To unstake you must first reset your active votes in gauges.
How Locking Works
The new locking mechanism is similar to the flexible HUM staking mechanism which already exists. With locking, users can now instantly gain veHUM for fixed timeframes. Users can also extend their locking period as well as lock even more HUM to get even more veHUM
In the locking mechanism, 1 staked HUM generates 0.014 veHUM every hour. So, for example, if you lock 10,000 HUM for 10 months, you will instantly get 1,000,000 veHUM (or 100x). The current max cap for locking is 12 months, meaning the cap for the locking model is now 120x.
Only one locking position can be created by a single account. Users will not lose all of their veHUM when the locking period ends; they will, however, lose all of their veHUM when they unlock their HUM tokens.
An Example:
We will borrow Platypus Finance’s clear example to illustrate the locking mechanism and its flexibility:
Homer locks 1,000 HUM for 6 months (~180 days) to instantly get 6 months’ worth of veHUM. How much is that? The max cap of his locking position, based on one year’s accrual, is 120,000 veHUM. 1 HUM generates 0.336 veHUM per day. Therefore, he was instantly able to obtain 60,480 veHUM (1000 x 180 x 0.336 = 60480 veHUM.)
Three months later, Homer wants to extend his locking period from 6 months to 12 months (another ~177 days). The amount of veHUM he can get by extending is 59,472 veHUM (1000 x 177 x 0.336 = 59,472). Now, he has a total of 119,952 veHUM.
Yet another month has passed and now Homer wants to get even more veHUM. But, this time, he cannot extend the lock period further because he has already reached his max cap. What can Homer do? He decides to lock 1,000 more HUM tokens. The maximum amount of additional veHUM he can get is 1,000 x 237 (the remaining time left on the original unlock) x 0.336 = 79,632. His total veHUM earned is now 199,584.
How Flexible Staking Is Changing
To reward our long-time users, we are raising the maximum veHUM accumulation from 100x to 180x the amount of stake HUM tokens. In other words, users who would have maxed out their veHUM accumulation can continue flexibly staking their HUM to continue to increase their veHUM position if they wish.
Locking HUM, however, will immediately grant users their maximum veHUM, which in turn gives them instant access to their fully boosted APR, as well as the ability to fully maximizing their gauge voting participation.
In summary:
- Liquidity providers (stable coins) receive only the base APR.
- Staking HUM earns a liquidity provider the base APR plus their gradually increasing boosted APR (based on accumulated veHUM).
- Locking HUM earns a liquidity provider the base APR plus their fully boosted APR (based on maximum received veHUM)
- Holding veHUM, users will receive their share of protocol fees and Metis rewards.
These METIS rewards are made possible by the incredible support of MetisDAO and its Metis Marathon. Hummus Exchange is exceptionally proud to be part of this burgeoning ecosystem and the Marathon.
Looking Ahead to Governance
The implications of HUM-locking point to the governance module under development at Hummus Exchange. Emissions from the Hummus protocol will be earned by those who support the protocol the most, thereby both strengthening the Hummus protocol and the user’s position and influence. Locked HUM places a given user in a stronger position than unlocked HUM would, thereby incentivizing the user to lock and deploy the difference in rewards back into the protocol.
As TVL grows on METIS, so will volume on Hummus Exchange, and therefore swap fees. The swap fees are returned to those who lock HUM, who can then put that value back into the protocol in the form of liquidity and/or locked HUM.
About Hummus Exchange
The Hummus Exchange protocol is a single-side and decentralized AMM designed for exchanging stable cryptocurrencies on the Metis blockchain.
Users can swap stablecoins on the Hummus Exchange with extremely low slippage and fees. They can also stake stablecoins to generate yield, and stake HUM tokens alongside to boost that yield.
Come check us out! Stop by to swap or stake around for longer.
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