Yield Farming and LP Incentivization
$BOND Network Liquidity Bootstrapping Program
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For an overview on BarnBridge please read our introductory post.
Synopsis
In order to facilitate a fair and inclusive distribution of $BOND tokens to future protocol participants, BarnBridge is proud to announce its upcoming two-phased liquidity mining program. We will be releasing two sequential staking contracts with distinct specifications around $BOND token distribution:
- Yield Farming
- Liquidity Pool Incentivization
Below we will explain the parameters of each contract, the differences between the two, and the rationale behind their respective mechanism designs.
Yield Farming
The first mechanism delivering initial $BOND token distribution to the community will be the Yield Farming staking contract. This contract will hold 8% of the total supply and will be distributed to community members who stake DAI, USDC, & sUSD. We chose these three stable coins (DAI, USDC, sUSD) because they will serve as the initial set of yield-producing assets utilized in our first product, the SMART Yield BOND. We thought it was only fair to tailor this first opportunity to earn $BOND token for the types of users who will graduate from their humble farmer beginnings to become active protocol participants; and to do that you must first hold the assets required for SMART Yield!
After all, we know Yield Farming is all the rage these days… but above all else its true purpose is to build the foundations of an engaged community whose incentives are aligned with those of the protocol, even once the crops run dry (and well beyond).
Participants can harvest their yield at the conclusion of each epoch. Each epoch will last 1 week, and an equal number of $BOND tokens will be distributed during each epoch. The participants’ harvest will be based on the amount of stable coins they have staked relative to the total amount staked in the pool. The calculation will be time-weighted to promote true and fair pro rata harvesting. Any participant can add to the pool during the duration of an epoch and receive rewards proportional to the time they are staked, but the funds must stay staked through the end of the epoch to be able to harvest the rewards. That’s Week 1 — the first epoch — plain and simple.
Liquidity Pool Incentivization
After the first epoch (1 week) of the Yield Farming program, we will offer the ability to harvest your spoils and migrate to new fertile soil in part 2: Liquidity Pool Incentivization. The concept behind the Liquidity Pool Incentivization initiative is to reward long-term liquidity providers with progressively more power over the protocol as they continue to signal their belief in the BarnBridge vision. Participants who believe in the vision represent the community, we hope, will gain significant control over the protocol’s long-term evolution, and are therefore the users who should be rewarded with the most plentiful harvest.
We will again be using the uniswapv2 BOND/USDC Liquidity Pool token (USDC_BOND_UNI_LP) as a means to reward liquidity pool providers a massive incentive to bootstrap protocol liquidity. The Liquidity Pool Incentivization initiative will run for 100 weeks and each epoch will last 1 week. At the end of the epoch the user can harvest their $BOND. This initiative will be granted 2,000,000 $BOND tokens and each epoch will have 20,000 $BOND tokens to start.
Summary
We are working diligently to get the liquidity mining program up and running, but unlike other projects in this space we are doing our diligence and having security audits done on all the contracts. Call us old fashioned, but we think the best harvest comes from well plowed yield soil. In the meantime have a look at our current mockup of the UI.
