Dynamic Index Operations

Dynamic Index Operations

PLP is a composite index comprising a basket of tokens that can be minted by depositing any of the constituent assets, and conversely, PLP tokens can be redeemed to withdraw any of the underlying assets.

The price for minting and redeeming PLP is dynamically calculated based on the following formula:

$$\boldsymbol{PLP=\frac{PLP\ Total\ Value\ Locked \ + \ PnL \ from\ Exercised\ Options}{Total \ PLP\ Supply}}$$

This calculation ensures that the PLP token accurately reflects the aggregate value of the underlying assets, including any realized gains or losses from selling options to traders.

When provided, liquidity is automatically locked for a minimum period of 7 days. In exchange, Liquidity Providers receive PLP tokens reflecting their position. During this locking duration, Liquidity Providers start to earn their proportional share of the protocol's premiums collected and are exposed to options exercise.