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OLP is an ERC-20 token on Arbitrum that represents a proportional share of the Ostium Vault. Unlike traditional LP tokens where 1 token equals 1 unit of the underlying asset, OLP’s price accrues with protocol fee earnings. Deposits and withdrawals both convert at the current OLP price, which is the primary performance metric for an LP and updates once per day after the daily settlement run.

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What Is OLP?

OLP stands for Ostium Liquidity Provider token. It is minted when you deposit USDC at settlement and burned when you withdraw at settlement. OLP is not staked or locked in a contract. Once redeemed to your wallet, it exists as a standard ERC-20 and can be transferred, traded, or held freely. The token accrues value passively. There is no separate claim flow and no staking interface. Protocol-level opening fees that accrue to the vault are reflected directly in OLP’s price-per-token at each daily settlement. Key property: 1 OLP ≠ 1 USDC. OLP price accrues. If OLP = $1.05 and you withdraw 100 OLP, you receive 105 USDC.

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OLP’s Position in the Protocol

OLP sits in the senior loss position of the Ostium Vault: a dedicated buffer of junior capital absorbs trader PnL first, in full, before any loss can reach OLP. OLP is also the working capital that the vault uses to pay winning trades during the day, with balances restored at daily settlement from the offchain hedge. See Vault Overview for the full explanation of the two-tranche structure and daily settlement cadence.

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OLP Price: Mechanism and Examples

OLP price recomputes once per day, after the daily settlement run. Between settlements, opening fees accumulate in the vault but are not yet reflected in OLP price. The per-token value updates in a single discrete step once settlement completes. Post-settlement OLP price reflects:
  • Opening fees earned since the prior settlement, allocated to OLP, divided across outstanding OLP shares.
  • Buffer-overflow losses, only if trader PnL during the day fully depleted the buffer and additional losses touched OLP capital. Under normal conditions this term is zero.
Under normal conditions, OLP price moves monotonically upward at each daily settlement, by the amount of opening fees earned per share. Worked example — Alice deposits and holds over 1 month:
  • Day 1: Alice deposits 1,000 USDC when OLP settles at $1.00 and receives 1,000 OLP.
  • Days 1–30: Each daily settlement credits Alice’s share with a pro-rata portion of opening fees earned that day.
  • Day 30: Suppose OLP has climbed to $1.005. Alice’s 1,000 OLP is worth $1,005.
  • If Alice withdraws, she receives $1,005 USDC at the end-of-window settlement price, a gain of 5 USDC over the month.

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Minting OLP (Deposit)

When you deposit USDC, OLP is minted at the next settlement price: Calculation: OLP received = USDC amount / settlement OLP price Example: You deposit 100 USDC when OLP settles at $1.05.
  • OLP minted = 100 / 1.05 = 95.24 OLP
  • You receive 95.24 OLP after settlement
New locked deposits are no longer available. The locking feature has been removed from the smart contracts. Any existing locks are honored until their expiration date and continue to accrue their original lock bonus.

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Redeeming OLP (Withdraw)

When you withdraw, OLP is burned and you receive USDC at the settlement price: Calculation: USDC received = OLP amount × settlement OLP price Example: You withdraw 100 OLP when OLP settles at $1.10.
  • USDC received = 100 × 1.10 = 110 USDC
  • You burn 100 OLP and receive 110 USDC
The price you receive depends on when your withdrawal settles (see How to Withdraw for the withdrawal window). If OLP rises during the settlement delay, you benefit; if OLP falls, you receive less.

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How LPs Earn

OLP earns from a single source: opening fees. 
OLP APR = (Opening fees paid to OLP per year) / (Outstanding OLP shares)
Every trade opened on Ostium pays an opening fee, and a fixed share of that fee flows to OLP holders at each daily settlement. There is no share of trader PnL, no rollover fees accruing to OLP, and no conditional state-based accrual. The opening-fee allocation to OLP is a tunable protocol parameter designed to produce a stable, predictable yield. It is periodically reviewed and can be recalibrated if realized APR drifts. Live and historical APR are published on the Dune dashboard. Worked example: Vault earns $500/day in opening fees allocated to OLP, OLP = $1.05, supply = 1,000,000 OLP.
  • Annualized opening fees to OLP = $500 × 365 = $182,500
  • Total OLP-denominated value = 1,000,000 × $1.05 = $1,050,000
  • APR = $182,500 / $1,050,000 ≈ 17.4%
Pre-upgrade, OLP APR ranged from approximately -4% to +50% depending on trader PnL and vault state. That range reflects the pre-JLU mechanics (OLP as junior counterparty to trader PnL) and no longer applies. The post-upgrade design produces a tighter, more stable range.
APR is not guaranteed. It depends on trading volume and the opening-fee allocation parameter. Past APR is not indicative of future returns.

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OLP Supply and Dilution

OLP supply changes as LPs deposit and withdraw:
  • Deposit: New OLP minted at daily settlement (supply increases).
  • Withdraw: OLP burned at end-of-window settlement (supply decreases).
Because both deposits and withdrawals settle at the same daily settlement price, there is no dilution or advantage between new and existing LPs. Everyone transacts at the same per-share price set by the most recent settlement.

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What You’ll See in the UI

OLP price. Updates once per day, post-settlement. This is the number that matters for your share’s value. Buffer health. Indicates how much junior capital sits between trader PnL and your OLP. Vault state. Normal state is collateralized. UC (under-collateralized) state is rare, temporary, and blocks new deposits until the buffer is restored. TVL. OLP price × outstanding OLP shares. Indicates the size of the senior tranche. This differs from the vault’s total USDC balance, which also includes the buffer and any in-transit settlement flow.

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FAQ

Under normal conditions, no. OLP price accrues at each settlement as opening fees are credited. The only scenario where OLP price declines is if the buffer is fully depleted and additional losses reach OLP capital. OLP deposits are not insured.
Once per day, after the daily settlement run. Between settlements, fee accrual is tracked internally but OLP’s per-share price updates in a single discrete step at settlement, matching the vault’s daily reconciliation between onchain and offchain books.
Yes, OLP is a standard ERC-20 and can be transferred to another wallet or listed on a DEX. Secondary markets may have low liquidity; withdrawing directly through the Vault UI is generally safer and more efficient.
Post-upgrade, OLP’s yield source is simplified to opening fees only. Because OLP is no longer the counterparty to trader directional flow, the previous accrual streams tied to that relationship (rollover fees and liquidation rewards in UC state) no longer flow to OLP holders. The fee allocation is a tunable protocol parameter, periodically reviewed.
UC state means the buffer has been fully depleted and additional losses are drawing on OLP. When this happens, the vault blocks new deposits as an accounting measure (deposits during a pending loss would create share-pricing ambiguity). Ostium’s operational priority in UC is to restore the buffer and return the vault to normal state. OLP price reflects any realized loss at the next daily settlement.