Tokenomics
This page will describe main tokens that are used in Lido on the Kusama network
The XC-20s tokens are a new type of interoperable tokens that conform to the ERC-20 standard but are also Substrate-native assets. All fungible assets created in this format will be able to move to other Kusama parachains, and remote parachain tokens will be able to move to Moonriver as XC-20s. The first XC-20 token, xcKSM, is now live within Moonriver’s fully Ethereum-compatible environment and can be created by transferring KSM from the Kusama relay chain.
MOVR is the utility token in the Moonriver network. It can be used to perform a variety of functions. Some of them include:
- providing an incentive to collators and facilitating the creation of the decentralized node infrastructure of the Moonriver network;
- paying transaction fees and implementing other activities on the Moonriver network;
- providing an on-chain governance mechanism that allows users to participate in the governance activities, such as voting and proposing network updates; and
- facilitating the gas metering function of the smart contract execution.
The stKSM token is a tokenized version of staked xcKSM. When a user transfers xcKSMs into the Lido liquid staking smart contract, they receive the corresponding amount of stKSM tokens. The stKSM token represents Lido users’ deposits, corresponding staking rewards, and slashing penalties. The stKSM token is a liquid alternative to staked xcKSMs: it can be transferred, traded, or used in DeFi applications. Lido makes the stKSM token balance track the corresponding balance of the Kusama chain KSMs. A user’s balance of stKSM tokens corresponds 1:1 to the amount of KSM a user can receive.
While the fact that the stKSM balance tracks the corresponding amount of the Kusama chain so that xcKSMs should be the main driver of the stKSM/xcKSM exchange rate, several other factors are affecting the market prices.
wstKSM token simply represents user shares in the stKSM token. wstKSM token can be used in other DeFi applications, where it is necessary to have a non-rebaseable token (with a stable balance, unlike stKSM, whose balance is constantly changing due to the rewards/losses accumulation). The wstKSM token price is equal to the price of one share of the stKSM token, so if Lido receives a lot of rewards, the price can increase dramatically.
The Lido DAO governs a set of liquid staking protocols with Lido on Moonriver among them. The Lido DAO decides on Lido’s key parameters (e.g., fees) and executes Lido upgrades. The Lido DAO members govern Lido to ensure its efficiency and stability. To have a vote in the Lido DAO, one must hold its governance token, LDO. LDO voting weight is proportional to the amount of LDO a voter stakes in the voting contract. The more LDO is locked in a user’s voting contract, the greater decision-making power the voter gets. The exact mechanism of LDO voting can be upgraded just like in other DAO applications.
Last modified 9mo ago