ICP lockup mechanics

Developers
1

Some questions and ideas on ICP:

  • Do we know what the relationship between lockup time, neuron age, and rewards looks like?
  • How are rewards issued, continuously or on an interval?
  • What are the rewards actually, cycles? Does the system reserve fund pay those rewards?

Locking up tokens isn’t great for capital efficiency, it’d be cool if we could use the locked ICP as collateral for something else, eg. borrowing. I’m thinking of something like this:

  1. Borrower locks up ICP, and also queues a message that gives a lending protocol the right to liquidate their ICP once it unlocks
  2. This locked ICP is used as collateral for a loan
  3. If borrower repays, they can cancel the queued message
  4. If borrower defaults, the lending protocol waits until the ICP unlocks, and is guaranteed by the system scheduler that they will receive those assets
  5. The lending protocol can liquidate ICP to remain solvent
  6. This is like collateralizing with a call option; the option premium would be reflected in a reduced interest rate for the borrower.

This does require a system-level scheduler (is that still on the table?) but would be a killer feature

EjLXYM0XcAM9w0H
EjLXYM0XcAM9w0H3470×2010 271 KB

5 Likes
2

Just rewatched the video, seems like rewards are in ICP (newly minted?).

Still curious about the actual rewards formula and distribution mechanics.

3

I have a similar question and would be grateful if anyone can answer - Will newly minted ICP rewards be locked in the neuron until it dissolves, or will they be able to be withdrawn immediately? In other words, can I lock up my ICP tokens in a neuron to create a stream of income?