Why you shouldn’t sleep on the potential of the LBR token with Lybra V2 coming

With the launch of Lybra Finance V2 there’s a lot of new functionalities coming to the open source DAO. It’s exciting to see the work that has been done to deliver great utility and how more good news keeps coming. The future looks bright for the DAO and it’s offering great value in the world of LST’s.

The LBR token is the governance token of the protocol. It gives voting power to the holders, allowing them to decide in which direction the DAO should evolve. In this article we’re going to zoom in on what V2 will bring for the LBR token and how you can benefit from it.

Voting Power

Holders of the LBR token will get voting power proportional to the amount of tokens they hold. So the more tokens you have the more voting power you get. Furthermore, the “Lybra wars” are coming which offer even more utility for the holders of the LBR token. Briefly summarized token holders will vote on how much esLBR will be sent to each LST pool. But there will be an opportunity for individual LST pools to bribe governance token holders to vote for their pools. The LST pools will provide incentives in the form of extra tokens in exchange for their vote. For more information about the Lybra wars I’ll refer you to the following tweet: https://twitter.com/LybraFinanceLSD/status/1686774722770649089?s=20

The end result will be more incentives/tokens for those who vote and hold esLBR.

Staking your LBR

Today you can already stake your LBR tokes, which will then be converted to esLBR. By doing so you’ll be earning eUSD, because you’ll be sharing in the revenue of the protocol. The APR fluctuates daily between 50–70% for now. This is a great yield on your esLBR, especially since it’s paid out daily to your wallet.

Boosting your esLBR yield

When you are minting eUSD or when you provide liquidity, you’re receiving esLBR depending on the amount of eUSD you’ve minted or on the amount of liquidity you’re providing. You can boost the APR you’re receiving by locking up your esLBR for a fixed period of time, ranging from 1 month to 1 year. The longer you lock your esLBR the higher the boost in your APR and thus the more esLBR you’ll be receiving.

Appreciation of the LBR token

Currently, the market cap of the LBR token is quite low compared to the value locked in the Lybra Finance Protocol. Given the fact that there’s a new bull market on the horizon and the fact we have V2 coming with improved tokenomics for the LBR token, there’s still great potential for the LBR token to increase in value. Especially if you look at how young the segment of LST’s and how low the current market cap still are.

Bounty program and LBR burn

When you’ve staked your LBR they’re converted to esLBR. When you want to withdraw the LBR token back to your wallet, you’ll need to go through a 90-day vesting period. This means your LBR will remain locked and become available to withdraw to your wallet after 90 days. With Lybra V2 there will be the possibility to make an early withdrawal, so you don’t need to wait 90 days. There will be a penalty when you exit earlier, the amount of the penalty depends on the days remaining to unlock your tokens. The tokens you’ll lose by exiting earlier will be offered at a 50% discount in the bounty program. When someone buys these discounted LBR tokens via the bounty program using LBR as payment, the LBR used to buy the tokens from the protocol are burned.

Conclusion

As you can see there’s a lot of utility added with Lybra V2 for the LBR token and there’s still a great upside potential for the token to appreciate in value. The LBR token is not just a governance token, but a token that can greatly increase your APR when interacting with the protocol. It’s a token designed to give you more value.

Disclaimer: This is not financial advice, please do your own research before investing your own money in crypto.