can anyone explain or link an explanation for how staking of LP tokens works? aka how the organiser of the LP staking generates value from staked LP tokens? plz!

Sep 21, 2022, 11:58 AM
the staking pool normally shouldn't mess with the underlying assets of the LP tokens. only offer incentive for a user to add liquidity to a pair.

the staking contract usually mints or distributes some amount of token in exchange for depositing LP (see MasterChef for example)

autofarms or other yield aggregators on the other hand, may redeposit the user's staked lp in a different lp staking contract to add some sort of boosted yield (see auto compounding Cake pool or Autofarm "strategies")

removing the liquidity and adding it back later is ultra risky so it should probably be avoided.
Sep 21, 2022, 2:08 PM

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