Incentives have to be claimed within the following three epochs (12 weeks); otherwise, unclaimed incentives will go back to the DAO treasury.

The general APR reflects the overall performance of PSP staking by considering all ParaSwap Revenue and the whole Total Value locked, without differentiating between pools. The APR is calculated by dividing the total Paraswap revenue by the TVL.

Boosted Pool projected APR (sePSP2):

The general APR sePSP2 stakers can obtain before applying ParaBoosts is calculated based on the revenue accrued so far during the current epoch and the median of the three previous epoch’s revenue, so it changes as the epoch progresses. 

The APR is calculated by ((Projection of current epoch ParaSwap Revenue * Current sePSP2 Paraswap Revenue Share) / Current sePSP2 TVL)*(365/28)

Basic pool projected APR (sePSP1):

The general APR sePSP1 stakers can obtain before applying ParaBoosts is calculated based on the revenue accrued so far during the current epoch and the median of the three previous epoch’s revenue, so it changes as the epoch progresses. 

The APR is calculated by ((Projection of current epoch ParaSwap Revenue * Current sePSP1 Paraswap Revenue Share) / Current sePSP1 TVL)*(365/28)

Please note that several factors may affect your individual APR and make it diverge from the APR estimations shown at the top of this page. To learn more about the calculation please view this documentation.

We strive to make staking as safe and transparent as possible, however, it's important to consider factors that may influence whether a particular staking option is appropriate for you.

Unbonding risk: When staking PSP tokens, there is a lockup period of 28 days. This means that investors will not be able to sell their tokens immediately, but instead need to wait 28 days after initiating unbonding before they can be traded again. This is something to keep in mind when deciding to stake, as crypto markets are highly volatile. Consider keeping funds liquid if you do not intend to hold PSP long-term. 

Protocol security risks: There is an inherent risk that the protocol could contain unknown bugs, this risk applies not only to staking but also the investment in PSP.

Please note that this is not an exhaustive list of all the risks related to staking.

PSP is the native token in the Paraswap ecosystem. PSP is the token that governs the ParaSwap Protocol and ParaSwap DAO. Its main purpose is to assist with the decentralization and efficiency of the protocol. 

Token Utilities:

Governance: Voting on improvement proposals for the ParaSwap DAO

Gas refunds: Receiving gas refunds based on trading on ParaSwap

Staking: Users can choose to stake either PSP (sePSP) or a 2x boosted PSP/ETH pool (sePSP2) to participate in the system through the Earn tab. Participating in ParaSwap by staking your PSP tokens through the sePSP method enables you to earn rewards. These rewards come from a share of the protocol's collected fees, which you receive in exchange for the services you offer to ParaSwap. The greater your contribution to the platform, the higher your earnings potential. Engaging in activities like trading, providing liquidity, and referring new users to ParaSwap can further enhance the returns on your staked PSP.

Paraswap is a Defi aggregator and does not have a consensus algorithm. The PSP token is used within the Paraswap ecosystem to govern the ParaSwap Protocol and ParaSwap DAO. Its main purpose is to assist with the decentralization and efficiency of the protocol.

When staking on the Social Escrow system of PSP, you are given two choices: Either a PSP-only staking option with sePSP1 or a liquidity-pool-based option with sePSP2, composed of PSP and the native gas token of the network you are staking in (such as ETH in Ethereum mainnet).

sePSP1:

Assets: PSP

Cooldown Time: 1 epoch

Voting Power Boost: 1X

sePSP2:

Assets: Balancer LP (80/20 P2P/ETH)

Cooldown Time: 1 epoch

Voting Power Boost: 2.5X

The PSP value of your sePSP2 is boosted by 2.5x and is then added to the PSP value of your sePSP1.

Once the base stake value is calculated, every achieved ParaBoost is applied. For example, if you received a 10% ParaBoost, your stake will be multiplied by 1.1.

Once the final ParaBoost is calculated, you will receive your stake in the split protocol revenue relative to all other stakers.

Engaging in activities like trading and referrals earns you a ParaBoost, increasing the value of your stake. These enhancements accumulate throughout an epoch, lasting four weeks. At the end of each epoch, all boosts except for the pooling boost are reset. If your ParaBoost has returned to its original value, it's likely that a new Epoch has started.

ParaSwap rewards its community for attracting new users. Through its unique referral program, both the referrer and the referred party can earn an increased share of a trade's positive slippage by using a referral link. Moreover, trades executed via this referral link grant a 20% boost to the person who made the referral, while the individual who was referred gets a 10% boost on these transactions.

PSP 2.0 tokenomics focuses on reducing PSP token emissions and incentivizing users who add value and perform services to ParaSwap by compensating them with a portion of the protocol fees in the form of native gas tokens (such as ETH). The PSP 2.0 model introduced:

PSP Staking Mechanisms

PSP 2.0 brings in two new staking methods, sePSP1 and sePSP2. These approaches are designed to optimize the use of the staked PSP, while simplifying the staking process compared to the earlier method. Please view our FAQ on ‘How to stake PSP’ to learn more about these options.

Protocol fee incentives

80% of the protocol fees are allocated to stakers, and the remaining 20% goes to the DAO treasury. These fees are collected from all networks where ParaSwap operates and are distributed at the end of each epoch in ETH.

Social Escrow System and ParaBoost

The Social Escrow PSP (sePSP) system is innovatively crafted to distribute the accrued protocol fees to users who contribute value and services to ParaSwap.

ParaBoost is the reward enhancement that users earn on their stake by engaging in value-added activities and service provision for the Protocol. For details on its calculation, click here.

ParaBoost categories

Learn more about the value added actions considered for sePSP here.