SBLP

SBLP is the platform's liquidity provider token.

Overview

SOBA Liquidity Provider Token (SBLP) consists of an index of assets used for swaps and leverage trading.

Users can mint SBLP by adding any index asset to the liquidity pool (LP) while SBLP is burned each time a user removes any index asset from the LP.

SBLP holders n rewards in the form of Zeta and esSBX tokens.

The SBLP token is designed to supply the liquidity required for leverage trading. As such, SBLP holders are the liquidity suppliers and they make a profit when leverage traders make losing trades. On the contrary, they make a loss when leverage traders make profitable trades. Past PnL data and other stats can be viewed.

Minting and Redeeming

Minting SBLP

Fees for buying SBLP will vary based on which assets the index has less or more of, the Buy SBLP page will show which assets have the lowest fee.

After buying your tokens will automatically be staked and you will start earning Escrowed SBX and ZETAs rewards.

Redeeming SBLP

Note that there is a minimum holding time of 15 minutes after minting before you can redeem SBLP tokens.

Rebalancing

The fees to mint SBLP, burn SBLP or to perform swaps will vary based on whether the action improves the balance of assets or reduces it.

For example, if the index has a large percentage of ETH and a small percentage of USDC, actions which further increase the amount of ETH the index has will have a high fee while actions which reduces the amount of ETH the index has will have a low fee.

Token weights are adjusted to help hedge SBLP holders based on the open positions of traders.

For example, if a lot of traders are long ETH, then ETH would have a higher token weight, if a lot of traders are short, then a higher token weight will be given to stablecoins.

If token prices are increasing, then the price of SBLP will increase as well, even if a lot of traders have a long position on the platform.

The portion reserved for long positions can be treated as stable in terms of its USD value since if prices increase the profits from that portion will be used to pay traders, and if prices decrease, the losses of traders will keep the USD value of the reserve portion the same.

Risks

Caution should be exercised when interacting with any smart contract or blockchain application. While risks are attempted to be mitigated through testing, audits and bug bounties, there is always a risk of vulnerabilities in smart contract code.