spSTR

Sterling Finance's governance blackhole

$spSTR is a Liquid Market product for Sterling Finance. A liquid wrapper for $veSTR, it allows for blackholing governance on Sterling with an open exit position at all times.

Sterling Finance is a ve(3,3) DEX on Arbitrum. Users earn governance tokens as yield that, once locked, give them access to trade fees & voting where token emissions go.

To unlock $STR's full governance potential, liquidity providers must lock their governance tokens up to 4 years. Dyson mitigates this process by taking the responsibility of holding locked tokens in exchange for an exit position that is yield-bearing.

How does $spSTR work?

$spSTR is a receipt token that is minted every time somebody supplies Liquid Market with $STR tokens. It acts as a representation of veSTR that is locked in the minting process.

Simple flowchart of spSTR

What if I want to exit my position?

If you want to exit your $spSTR position, just exit using the $spSTR / $STR liquidity pool on Sterling.

How does $spSTR keep its peg?

Due to the nature of $spSTR, it is highly incentivized by Dyson using its veNFT gathered from the liquid wrapper. Users who also want to make the most out of their minted tokens must deposit into the spSTR/STR vault on Dyson to earn rewards. This is to ensure deep liquidity at all times for a stable peg. If spSTR is off-peg, the protocol uses yields & deposits to arbitrage the peg back to a 1:1 ratio.

Liquidity sink & governance blackhole

Because using $spSTR requires the vault to perpetually lock $STR, Dyson acts as a liquidity sink for $STR holders, and a governance blackhole to Sterling. As Dyson's veNFT grows, so does its potential for yielding rewards for $spSTR.