Yield farming

While spNFTs in staked positions have a diverse range of applications, one of their primary initial functions will be to substitute traditional yield farming mechanisms by offering DonutSwap incentives.

Yield-Bearing NFTs

From a user's perspective, the mechanics share many similarities with regular DeFi farms. However, instead of allocating rewards to these conventional farms, the DonutSwap Master contract disburses incentives to all staking positions within team-defined wrapped LPs.

In simpler terms, merely owning a staking position does not guarantee a user will receive DonutSwap yield incentives. This is only applicable to specific assets chosen by the team. The list of incentivized positions can be found on this page.

Once a staked position's LP is part of the listed pairs, the spNFT begins generating yield with rewards from the Master, as if its owners were staking in a typical farm.

Rewards

DonutSwap incentives come in the form of dual rewards: eligible wrapped DonutSwap LPs will have their corresponding staked positions receive both DSP and YUM rewards. The distribution ratio between these rewards varies by asset, with a default ratio of 80% YUM to 20% DSP.

Yield Multipliers

There are two ways to enhance returns from yield-generating staked positions: through locks or the YieldBooster plugin.

Both values can range from 0% to 150% (x1 to x2.5), but they are generally set to their default value of 100% (x2) for most assets.

The sum of these two multipliers determines the total multiplier of the position. Each pool has its own maximum boost, typically set at 200% (x3) by default, with an absolute cap of 250% (x3.5).