🗳️ veSDT: Voting Power and Boosting Rewards

Boosting your Potential

🌐 veSDT Concept and Specificities

veSDT, or voting-escrowed SDT, is a non-transferable token that represents locked SDT. When users lock their SDT into veSDT, they gain enhanced rewards and voting power within the Stake DAO platform. However, there are a few key specificities to keep in mind:

Non-transferable Tokens: veSDT tokens are non-transferable by design. Once an address owns veSDT, it cannot transfer or sell them in any way.
Single Lock per Address: Each account can only have a single lock duration. This means that a single address cannot lock certain SDT tokens for 2 years, then another set of SDT tokens for 3 years, etc. All SDT per account must have a uniform lock time.
Unallocated Voting Power when Increasing Lock: When increasing the veSDT balance by locking more tokens or extending a lock, this new veSDT balance is not taken into account in the current lockers/strategies vote allocation. Users should be careful to apply this new voting power to the gauges if they want to.
Decreasing veSDT Balance: After an address starts owning veSDT, its balance decreases with time to reflect the lock time expiration. This decrease in veSDT balance is reflected in real time when voting for gauge rewards.

⚗️ Lock formula

Depending on the lock time, a specific amount of veSDT are generated from the SDT locked. The lock scale is as follows:

1 SDT locked 1 year → 0.25 veSDT
1 SDT locked 2 years → 0.5 veSDT
1 SDT locked 4 years → 1 veSDT

The general formula to compute the veSDT balance at any point in time is:

\frac{{\text{{lock time remaining in seconds}}}}{{\text{{4}} \times \text{{365}} \times \text{{24}} \times \text{{3600}}}} \times \text{{SDT locked}}

It's only at the end of the lock time that it becomes possible to recover the locked SDT tokens. During lock time, users can also increase their veSDT balance by locking up SDT, extending the lock end date, or both.

Example: 12 SDT locked for 2 years and 8 months (with 30d/month) would give:

\frac{{\text{{(}} \text{{2}} \times \text{{12}} \text{{+}} \text{{8}} \text{{)}} \times \text{{30}} \times \text{{24}} \times \text{{3600}}}}{{\text{{4}} \times \text{{365}} \times \text{{24}} \times \text{{3600}}}} \times \text{{12}}

\frac{{\text{{960}}}}{{\text{{1460}}}} \times \text{{12}} \text{{=}} \text{{7.8904}}

As detailed above, the quantity of veSDT decreases constantly with time to reflect the reduction in lock time (lock expiration), down to 0 at expiration. For example, two months after the initial lock, the previous address would have a veSDT balance of:

\frac{{\text{{900}}}}{{\text{{1460}}}} \times \text{{12}} \text{{=}} \text{{7.3973}}

🚀 Boosting with veSDT

In Stake DAO, "boosting" means increasing your rewards and voting power by locking your SDT tokens. Here's how it works:

Boosting sdToken Rewards: By staking your sdToken on the Liquid Lockers gauges, you can earn additional rewards.
Voting Power Boost: Boosting also enhance your voting power with sdTokens.
Strategies Boost: As a liquidity provider, staking your LP tokens in Stake DAO strategies will yield extra rewards.

For more details on the boosting formula, please refer to the Boosting page.

By locking veSDT, a user who has staked 1000 sdCRV and 1000 sdFXS (and is therefore maximally boosted) will have around 1330 veCRV and 2220 veFXS worth of voting power (as of 8 Dec 2023). They will receive a 2.50x boost on their rewards, whether they're using strategies or lockers.

🤍 veSDT Governance Whitelisting

Like in Curve and Frax systems, smart contracts & DAOs require whitelisting by governance to lock SDT for veSDT. Only externally owned accounts (EOA) can directly call the veSDT stake locking function. To have your protocol or DAO own veSDT, you can begin the governance process with the SDT community in the governance forum by submitting a whitelisting proposal. (opens in a new tab)

🚀 SDT 🏦 Votemarket