The stLCI Token

The stLCI token serves as the staked version of the LUCIA Protocol's secondary token, LCI. It can be acquired by users through two separate mechanisms. Firstly, by staking their LCI tokens in a designated "PLOT," users can accumulate stLCI tokens. The second pathway to gain stLCI is by providing liquidity directly into the "PLOT." It's important to note that each stLCI token is a unique, non-fungible entity containing four specific data points:

1. Quantity of locked LCI (Q_LCI)

2. Duration of the lock-up period (T)

3. Associated Barn (B)

4. Corresponding weight within the system (W)

stLCI Acquiring Mechanisms

Users can acquire stLCI tokens through two separate methods:

• Staking LCI tokens in a designated "PLOT."

• Directly contributing liquidity to the "PLOT."

Revenue Sharing via stLCI

Staking LCI to acquire stLCI allows users to participate in multiple revenue streams generated within the LUCIA Protocol. These revenue channels include:

• Merchant Processing Fees

• Outstanding Balance Rates

• Repay Balance Rewards

• Insurance Premiums

• Insurance Administration Fees

• Loan Liquidations

• Flash Loans

• Discount Swaps

• Bonds

Lock-up Period and Weighting Mechanism

One of the unique aspects of stLCI is the user's ability to choose the duration of their LCI token's lock-up period (T). The length of this lock-up is directly proportional to the 'weight' (W) factor that is embedded within each stLCI token. In other words, a longer staking commitment will result in a higher weight, thus influencing the proportion of fee-sharing the user can expect to receive.

Where f(T) is a function that maps the duration of the lock-up to the weight.

This weight directly affects the user's share in the protocol's revenue streams. Specifically, a longer lock-up period corresponds to a higher weight, which in turn translates to a larger proportion of fee-sharing.

R is the total revenue generated and W_i is the weight of the ith stLCI token, which is used to calculate the user’s share S as:

Long-Term Commitment Incentives

The stLCI token is crafted to endorse long-term engagement through its weight-based fee-sharing mechanism. Opting for a more extended lock-up period amplifies a user's W, thereby benefiting them with a more substantial share of the generated revenue.

In the broader scope, higher weights aggregate to boost the protocol's overall financial stability and liquidity.

This weighting mechanism not only incentivizes prolonged user engagement but also injects a self-sustaining robustness into the LUCIA Protocol's financial architecture.