[LIP-9] Lightning v2

A revamped Lightning Liquidity Programme proposal (LIP-9) is now up for $ZWAP holders to vote on.

This new programme aims to automatically assign Allocation Points (AP) based on a pre-agreed formula. Future votes will be centered around fine-tuning the 3 variables in yellow.

What do the variables mean?

  1. This is the current cap of APs per pool (5AP)

  2. This takes the square root of liquidity as the base factor (e.g. 25m → 5AP)

  3. This caps AP to a target volume ratio of 0.01 to prevent highly liquid, low volume tokens from being rewarded

How does the formula work?

Each qualifying pool’s AP will be automatically calculated by taking the smallest value of the 3 variables the formula. Below are some scenarios for illustrative purposes.

What benefits do $ZWAP holders get?

  • A single transparent formula to fairly decide AP allocation
  • More token pools get rewarded
  • $ZWAP holders can vote to continuously tweak and improve key variables within the formula that best benefit projects and the ZilSwap community

Are there any pre-requisites for tokens to be elligible for this programme?

  • Token has to have a minimum liquidity of 500k $ZIL on ZilSwap
  • Token has to be registered on ZilStream for transparency


@Snowsledge - so this is to allocate 60 AP points for any qualified tokens, right? is there any parameter to not exceed 60 AP ? I also guess any un-utilized AP goes to ZWAP pool

another feedback – we need to remove new token at least for 1st month from qualification. The volume and liquidity spike will be unfair when new token are listed in pool - example ZILO launch. Let’s vote every month for new tokens at least.

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There are no caps for total APs in this new scheme. ZWAP pool will always be assigned 40APs.

The cycle is every rewards epoch (1 week). All tokens need to qualify using the EMA-30 days liquidity/volume metrics tracked on ZilStream page.

There will be no more voting every month for tokens in this new scheme. You only vote for change in the factors if required.

okay … let’s go for voting :slight_smile:

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I would recommend using $ZIL instead of $ in the formulas. The reason behind it → $ prices are very volatile, and the same amount of $ZIL liquidity and transactions will give different results for every epoch (since we have constant values in the formula). Since the whole ecosystem revolves around $ZIL it would be easier and more consistent (similar reasoning was applied for LIP-4 where it was initially in $ then changed to $ZIL). When using the same formula reward division looks pretty good:

The ZWAP value I assumed that all unlocated APs go to that pool, so that value might vary depending on the decission.


With the current figures a max of 100ap will not be reached nor is there any situation where the ap is capped, according to snowsledge this is by design so my question is how are rewards calculated, from what I can tell there’s 2 scenarios:

  1. reward = 6250 * ap / 100
  2. reward = 6250 * ap / sum of ap

if scenario 1, do the left overs go to Zwap?

Thundar on zilswap confirmed:

in LIP9, there will no longer be a cap of 100AP. Any token can be elligible for rewards as long as they meet the said criteria. ZWAP will automatically be given a fixed 40AP allocation and will not get any “left overs” unlike the current syste

e.g. if the total number of APs in a given week is 60 , and Token X is elligible for 2 APs (based on the formula), the amount of reward Token X’s pool is elligible for will be 2/60 * weekly zwap reward allocation

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