SHLP

SHLP is the platform's liquidity provider token.

Overview

SHLP consists of an index of assets used for swaps and leverage trading. It can be minted using any index asset and burnt to redeem any index asset. The price for minting and redemption is calculated based on (total worth of assets in index including profits and losses of open positions) / (SHLP supply).

Holders of the SHLP token earn Escrowed SHK rewards and 70% of platform fees distributed in ETH. Note that the fees distributed are based on the number after deducting referral rewards(TBA) and the network costs of keepers, keeper costs are usually around 1% of the total fees.

Staked SHLP token address (Polygon zkEVM): 0x208198172988904514984E668e134a3e5a9C398f

As SHLP holders provide liquidity for leverage trading, they will make a profit when leverage traders make a loss and vice versa. Past PnL data, SHLP price chart and other stats will soon be displayed on a dedicated statistics page.

Minting and Redeeming

Minting SHLP

  • Bridge any of the SHLP tokens to Polygon zkEVM, a list of SHLP tokens can be found on the Dashboard.

    • Fees will be lower for tokens that the pool has less of, check the "Save on Fees" section to get the lowest fees

    • You should buy the token with the lowest fees from Ethereum and then bridge that token directly as these tokens are likely more expensive to purchase on Polygon zkEVM

  • For Polygon zkEVM, ensure that some ETH is bridged over as you need it to pay for the network fees

  • Key in the amount of SHLP you'd like to purchase on: https://shrike.dovish.finance/#/buy_shlp

Fees for buying SHLP will vary based on which assets the index has less or more of, the Buy SHLP page will show which assets have the lowest fee.

After buying your tokens will automatically be staked and you will start earning Escrowed SHK and ETH rewards, you can check your rewards at https://shrike.dovish.finance/#/earn.

Redeeming SHLP

Key in the amount of SHLP you'd like to redeem at https://shrike.dovish.finance/#/buy_shlp#redeem.

Token Pricing

There may be a spread on some tokens, minting SHLP will be based on the lower value of the token and redeeming SHLP will be based on the higher value of the token.

For stablecoin tokens, the spread will be from the API3 Oracle price of the stablecoin to 1 USD.

The price of SHLP will depend on the spread of the tokens in the pool as well.

Rebalancing

The fees to mint SHLP, burn SHLP or to perform swaps will vary based on whether the action improves the balance of assets or reduces it. For example, if the index has a large percentage of ETH and a small percentage of USDC, actions which further increase the amount of ETH the index has will have a high fee while actions which reduces the amount of ETH the index has will have a low fee.

The token weights can be seen on the Dashboard.

Token weights are adjusted to help hedge SHLP holders based on the open positions of traders. For example, if a lot of traders are long ETH, then ETH would have a higher token weight, if a lot of traders are short, then a higher token weight will be given to stablecoins.

If token prices are increasing, then the price of SHLP will increase as well, even if a lot of traders have a long position on the platform. The portion reserved for long positions can be treated as stable in terms of its USD value since if prices increase the profits from that portion will be used to pay traders, and if prices decrease, the losses of traders will keep the USD value of the reserve portion the same.

If a lot of traders are short and larger weights are given to stablecoins, then SHLP holders would have a synthetic exposure to the tokens being shorted, e.g. if ETH is being shorted then the price of SHLP will decrease if the price of ETH decreases, if the price of ETH increases then the price of SHLP will increase from the losses of the short positions.

Risks

Caution should be exercised when interacting with any smart contract or blockchain application. While risks are attempted to be mitigated through testing, audits and bug bounties, there is always a risk of vulnerabilities in smart contract code.

For details of contract operation please read the Contracts section.

A non-exhaustive list of some risks:

  • Smart contract risks

  • Counterparty risks: The SHLP pool is the counterparty to traders, if traders make a profit that comes from the value of the SHLP pool

  • Token risks: Bridged tokens may depend on the security of the bridge, pegged tokens have risks of depegging

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