MasterChef model pioneered by SushiSwap has been widely adopted and has proven to be a popular way for users to earn rewards by providing liquidity to various protocols. However, one limitation of this liquidity incentive approach is that it offers the same level of rewards to every LP, regardless of their level of commitment, whether they are short-term farmers or dedicated long-term users. To address this issue, spNFTs mechanism has been designed to provide fitting incentives to each LP based on their long-term dedication, thus promoting a sustainable and equitable farming experience.
When a user enters a liquidity provision position by providing liquidity to WispSwap DEX, they can then mint an spNFT by wrapping their position into WispSwap’s NFT Wrapper.
This spNFT acts as a transferable deposit receipt and is the only thing that allows the user to withdraw their attached funds, regardless of the original deposit maker.
Those receipts are the only thing allowing a user to withdraw the corresponding funds, regardless of who is using them, so the owner of a spNFT is also the actual owner of the corresponding LPs, even if he did not deposit them originally.
But spNFTs are more than simple receipts: they have yield-bearing properties and automatically generate rewards when their wrapped LP has been configured to receive WispSwap incentives in the form of WISP and veWISP tokens. spNFTs also have a lock feature that allows a position to be locked at any time for any length of time, with a proportional bonus awarded to users who lock their yield-bearing positions.