Liquidity Mining Program (Update)
With this article, we announce an important change in the $DEXTF liquidity mining program for which 25 million tokens (25% of the total supply) are being reserved. In building the platform, we had in mind to create deep liquidity markets for our XTF token funds and hence the decision to have a relatively longer distribution of 5 years.
Starting 15th October 2020, we will implement fairer rules aimed at building that liquidity organically and incentivize those farmers that decide to contribute for longer times.
The only rule that will go unchanged is the $DEXTF rewards ratio, which is:
- 30% for the DEXTF/ETH pool
- 70% across all other pools proportionally to the size of each pool in USDT terms
Now, daily distributions are inherently bad for maintaining a stable and growing liquidity, as the focus will shift from building great and diversified XTF funds to building funds with the sole purpose of extracting value. We’ve introduced new rules to that end, and the community has responded well.
The distribution terms will change.
Instead of being distributed daily, tokens will be “streamed” to a unique smart contract every 15 seconds (1 block) and will be claimable in full only after 30 days through the farmer’s Metamask account. This applies even if you farmed for one day or one hour, tokens can only be claimed at the end of each term. So effectively the distribution has been delayed from daily to monthly. (streaming will be done via a third party provider (Sablier) and users will be able to see their balances directly on the app).
Liquidity providers that maintain their LP tokens for the full term (15th of M-1 to M) will be entitled to an additional 10% reward in $DEXTF. Conversely, those that remove liquidity by more than 10% relative to their own liquidity, over the same period, will see their rewards slashed by the same percentage decrease.
For example if your monthly accruals are expected to be 15,000 $DEXTF at the end of the period but you reduced your liquidity contribution by 30%, you will only receive 10,500 $DEXTF.
This means that if some farmers decide not to be LPs for the full term or if farmers decide to remove their liquidity by more than 10%, their rewards’ balance will be reserved for future distributions. In other words, the 10% additional tokens will come from LPs that remove their liquidity over the month to reward those that sustainably contribute liquidity to the ecosystem.
For example let’s consider the first month 15th October to 14th November. LPs will start to accrue tokens, which will visibly and dynamically increase every 15 seconds starting from the 15th November and only on the 15th December they will be fully claimable.
The token distribution under the new liquidity mining program is delayed by one month, in which no tokens will be streamed or distributed as the period 15 Oct-14 Nov will be used to assess the token accrual for each LP and subsequently streamed daily starting from 15 Nov and only fully claimable by 15 Dec. However, an LP can choose to claim daily as the streamed tokens are effectively rewards accrued the prior month.
In other words, if an LP chose to start providing liquidity on 15 Nov, the LP will accrue tokens on the month between 15 Nov-14 Dec. Tokens will only start to be streamed from 15 Dec 2020 and to conclude by 15 Jan 2021. Therefore, liquidity mining rewards will only be distributed daily over the month after the assessment month. In this case, the LP will have a full month delay in receiving tokens and for that the farmer will be entitled to a 10% reward.
Let’s assume that you will accrue 10,000 tokens if you were to be a LP for the full term. Every 15 seconds you will be streamed (10,000/30/24/240) 0.05787037 tokens (1 block).
That means that at the end of each day you’d have:
15th Nov: 333 tokens
16th Nov: 333 tokens
17th Nov: 333 tokens
15th Dec: last batch of 333 tokens + 10% full term reward (additional 1,000 tokens).
Liquidity contribution to the various pools will be calculated based on the number of UNI-v2 you have in the DEXTF/ETH pool and the sum of the UNI-v2 on all the other whitelisted pools (you can request to whitelist one via email@example.com). This ensures that the price of the fund does not impact your rewards. As long as you don’t withdraw, your rewards are safe even if the fund price drops by more than 10%.
You can change your liquidity among the various pools and you will still receive the full accrued amount, provided that the overall sum is not reduced by more than 10%, over the period going from 15th of M-1 (month prior to rewards distribution) and M (month of rewards distribution).
You can choose to contribute liquidity to just the DEXTF/ETH pool if you like or a mix of pools.
Accrued amounts for each user will be made publicly available on the 15th of each month and distributed/streamed over 30 days directly to users’ wallets.
Example for illustrative purpose (refer to table for calculations) only:
- User #1 will receive the full accrued amount + 10% bonus
- User #2 will receive the full accrued amount + 10% bonus (liquidity switching among pools is less than 10%)
- User #3 will receive the full accrued amount + 10% bonus for the DEXTF/ETH pool but a deduction of 20% for the other pools because the liquidity dropped by 20%
- User #4 will receive the full accrued amount (the liquidity only dropped by less than 10%.)
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