In Chapter 2: LPToken, we learned about the special LPToken you receive when you deposit assets into an SPA Pool. We saw that its balance automatically changes (rebases) as the pool earns fees.
While this rebasing feature accurately reflects your growing share of the pool, it can be tricky to handle for other parts of the decentralized finance (DeFi) world. Many DeFi protocols, like lending platforms or yield aggregators, are designed to work with standard tokens whose balances only change when explicitly transferred.
Imagine you have that special LPToken certificate from Chapter 2. The certificate itself represents your share, but the underlying value of it keeps changing automatically. Now, suppose you want to deposit this certificate into a digital vault that only accepts standard-sized items and doesn’t understand these self-changing numbers. It gets confused!
The WLPToken (Wrapped LP Token) solves this problem. It acts like a standard-sized frame for your valuable, but unusually behaving, LPToken certificate.
WLPToken stands for Wrapped LP Token. It’s a different kind of token that “wraps” your original LPToken.
Here’s the core idea using our analogy:
WLPToken
contract acts like a vault or a frame maker.WLPToken
. Think of this as a standard token representing the framed certificate.WLPToken
frames you hold stays constant unless you send or receive them, just like a regular token.WLPToken
frame still goes up (or down) based on the underlying LPToken certificate inside it. If the LPToken earns more fees, each WLPToken becomes worth more LPTokens.In simple terms: WLPToken turns your rebasing LPToken into a standard, non-rebasing token ( apparently) that holds the value of your LP position, making it easier to use elsewhere in DeFi.
Let’s say you have some LPTokens from providing liquidity, but you want to use their value in another DeFi protocol that requires a standard ERC20 token. You’d use the WLPToken
contract.
Use Case: Wrapping LPTokens to get WLPTokens.