💵CLP

CLP is the platform's liquidity receipt token.

What is CLP?

CLP constitutes a leveraged trading index encompassing various assets. Token creation involves minting with any index asset and redemption via burning. Minting and redemption prices are algorithmically computed based on total index asset value, encompassing realized profits, losses, and prevailing CLP token supply.

Within Canto's ecosystem, CLP holders accrue Escrowed CAD rewards and 70% of platform fees in CANTO. Fee distribution factors in deducted referral rewards and keeper network costs, typically amounting to 1% of total fees.

Emphasizing network specificity, CLP tokens are non-transferrable across networks. CLP holders strategically engage in liquidity provision for leverage trading, profiting inversely to leverage traders—gaining when traders incur losses and vice versa.

CLP User Actions

Interacting with CLP

CLP is comprised of an assortment of different assets. At launch, these will include:

• $ETH

• $CANTO

• $ATOM

• $cNOTE

As Cadence Protocol progress, other token offerings will be included in the pool. The current tokens in the CLP pool can be found on the Dashboard.

To mint CLP, visit the CLP Buy Page. The fees for buying CLP dynamically vary based on which assets the index has less or more of. These fees will be shown in the CLP Buy Page.

Note that after buying CLP, your tokens will automatically be staked and you will start earning Escrowed CAD and CANTO rewards. You can confirm this and check your rewards on the Earn Page.

For redeeming CLP, key in the amount of CLP you'd like to redeem at: https://app.cadenceprotocol.io/#/earn.

Token Asset Valuation

There may be a spread on some tokens, minting CLP will be based on the lower value of the token and redeeming CLP will be based on the higher value of the token. For stablecoin tokens, the spread will be from the Redstone price of the stablecoin to 1 USD. The price of CLP will depend on the spread of the tokens in the pool as well.

Pool Readjustments

The fees to mint CLP, burn CLP, or 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 NOTE, actions that further increase the amount of ETH the index has will have a high fee while actions that reduce 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 CLP 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 CLP 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 CLP holders would have a synthetic exposure to the tokens being shorted, e.g. if ETH is being shorted then the price of CLP will decrease if the price of ETH decreases, if the price of ETH increases then the price of CLP will increase from the losses of the short positions.

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 any smart contract code. For details of contract operation please read the Contracts section.