> For the complete documentation index, see [llms.txt](https://docs.sherpa.trade/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.sherpa.trade/general/tokenomics/msherp/conversion-factors.md).

# Conversion Factors

### The SHERP:mSHERP conversion ratio changes depending on two criteria:

#### 1. Length of time-lock <a href="#id-1-length-of-time-lock" id="id-1-length-of-time-lock"></a>

Ranging from a minimum of one day (99% conversion loss) up to a maximum lockup of two years (0% conversion loss)

*E.g.,* Users locking for the full two years receive at least a 1:1 (1x) conversion on their `SHERP` to `mSHERP`. Users locking for the lock minimum of one day receive a conversion ratio of 1:0.01 (0.01x)

#### 2. Value of SHERP stake at time of lockup <a href="#id-2-value-of-sherp-stake-at-time-of-lockup" id="id-2-value-of-sherp-stake-at-time-of-lockup"></a>

Ranging from $10 minimum stake (1x ratio multiple) to a $10M maximum stake (2x ratio multiple)

Users can stake more than 10M$ however no additional value / volume benefits will be granted. This is currently scaled based on USD; however, it may be switched to being scaled by `SHERP` amount (a [governance vote](https://docs.sherpa.trade/docs/governance-vote) will be conducted prior to mainnet launch to determine whether the community prefers USD or `SHERP` weighted volume multipliers)

*E.g.,* As delineated in Chart 1 below, users locking `SHERP` worth at least $10,000 at current market value (not factoring in price impact or slippage) receive a 1:1.41 conversion if locked for the full two years. If their `SHERP` is worth less than $100 then they receive a 1:1 conversion, even for locking the full two years.

#### Key Points <a href="#key-points" id="key-points"></a>

* The time-lock factor is of primary importance for determining the `SHERP` to `mSHERP` conversion. The stake value serves a secondary role and acts as a modifier of the base ratio predetermined by the time-lock length. *I.e.* a user that meets the maximum threshold for time-locking (two years) but only the minimum threshold for stake value ($10) receives a better conversion ratio than a user who meets minimum time-lock and maximum stake value. *E.g.* 10$ locked for two years yields 1:1 ratio while $10,000,000 locked for one day yields 1:0.02 ratio
* Both the time weighted and volume weighted variables shift based on a quadratic formula.
* Upon expiration users receive back the exact amount of `SHERP` originally locked.
* The more `mSHERP` a user holds, the greater the `SHERP` staking rewards received.
* The full range of benefits received by holding certain amounts of `mSHERP` are fully laid out in the [VIP Tier Schedule](https://docs.sherpa.trade/docs/vip-tier-schedule).

<figure><img src="/files/cavuJol3lYjT4nwBMY15" alt=""><figcaption><p>Chart 1 - mHEDGE Multipler Received</p></figcaption></figure>

<figure><img src="/files/ZKpzx7dqrWzy9MNTZdQv" alt=""><figcaption><p>Chart 2 - mHEDGE Quantity Received</p></figcaption></figure>