How does LRT² work?
Last updated
Last updated
LRT² is an LRT-agnostic rewards model, for simplifying and consolidating restaking rewards.
As restaking protocols transition to sustainable restaking reward models, where stakers earn a combination of restaking protocol tokens and rewards from AVS operators, those AVS and other related rewards will be distributed as multiple tokens over time. However, under this model most users would be claiming a fragmented set of tokens and potentially in dust amounts. This can mean poor liquidity and high volatility. Instead, ether.fi will use LRT² to consolidate all restaking rewards into a single token for enhanced ease-of-use, improved liquidity, and better price stability.
ether.fi will provide weekly claims of LRT² based on your ether.fi staking activity in these protocols, and will enable you to unwrap your LRT² into it's underlying tokens at any time, should you wish to. Currently, LRT² distributes EigenLayer rewards. In the future, this will expand to include your staking activity across other restaking protocols as well, such as Symbiotic and Karak.
Each week, ether.fi will tally up the total rewards earned from staking in participating restaking protocols, and allocate them to our users proportionally, based on eETH, weETH, or ether.fan NFTs held or deposited into integrated DeFi protocols. ether.fi loyalty points boosts will not affect LRT² token allocations.
See How APR is Calculated for APR details.
ether.fi will use the rewards from participating restaking protocols & AVSs to mint LRT² tokens. Those assets are deposited into the LRT² contract, and ether.fi receive LRT² tokens with the same value. The value of LRT² tracks the value of the distribution of underlying tokens.
ether.fi will distribute the LRT² tokens through a cumulative claims distributor contract. This means that you do not need to claim every week, but can wait until the right time for you to claim. If you continue to stake without claiming, your claimable amount will continue to rise week-over-week. This will help smaller stakers avoid potentially punishing gas fees. Claims will be open at all times, and the allocation will be updated weekly.
LRT² holders will earn LRT² points - read more about LRT² points.
Users may swap LRT² on supporting DeFi protocols, and may find potential arbitrage opportunities.
Additionally, holders can choose to unwrap their LRT² tokens for the underlying tokens. They will receive a proportional distribution of the underlying tokens, equal to the value of their LRT².
I deposited into a DeFi protocol that isn't yet integrated - what will happen to my weekly rewards?
Since ether.fi uses a cumulative claims contract, ether.fi is able to make sure that your LRT² is properly allocated to you once we integrate the DeFi protocol. Each week, we will recalculate what your distribution should have been for the last few months, and ensure you're able to claim that full amount.
For deeper technical details, see the LRT² protocol whitepaper: https://lrt2.gitbook.io/lrt2/docs/whitepaper
