Updated XDB Liquidity Reward Program
The DigitalBits ecosystem has continued to expand since the previous update. The DigitalBits Foundation have now been running this programme into its 10th successive month and have been extremely satisfied with the development that has been taking place.
The current LP reward programme has currently been producing 11,725 XDB per day across the two respective pools on Uniswap. XDB-ETH & XDB-ZUSD. Both of these provide a total of 5,862.5 XDB per day each.
The DigitalBits Foundation has decided, amongst the growing success of the ecosystem, to reduce the LP rewards by 50%. These changes bring the new total to 5,862.5 XDB tokens per day. The ETH and ZUSD pools will go ahead providing 2931.25 XDB tokens per day each respectively.
Liquidity Reward Program details
Start: Wednesday, November 17th, 2021, approximately 11am EDT.
Expiration: No date set. Please note the Foundation reserves the right to terminate the programme at any time.
Reward Size: The new reward size will be 0.4375 XDB tokens per one (1) Ethereum block mined. The Foundation also reserves the rights to adjust reward sizes and values with a seven (7) day notice period provided as the ecosystem and programme matures and develops further.
Reward Distribution: Rewards will be distributed every seven (7) days so long as the program is operational. Rewards will be distributed based on a Liquidity Providers (LP) proportional contribution to the Uniswap XDB-ETH liquidity pool. There is no minimum or maximum contribution amount required to participate in this program.
Due to gas prices, there is a set threshold to receive your rewards distribution. XDB token rewards will only be sent to you after your reward balance reaches a minimum of 2,000 XDB tokens. Smaller balances will be carried forward into the next period’s rewards until it meets this minimum threshold requirement.
How does the programme work?
Per day, there are approximately 6,700 Ethereum blocks during a day. Each block is providing 0.4375 XDB. Therefore per day, there are approximately 2,931.25 XDB tokens per pool.
This program is automated! LPs can add and remove liquidity freely from Uniswap and this will be tracked at all times, and every time there is a change, the proportionate reward distribution readjusts for that period.
Below is an example of how rewards are calculated:
● You contribute $10,000 worth of liquidity for a week with the total XDB-ETH Uniswap liquidity pool is $200,000.
● Your share is 5%, therefore you are eligible for 5% of the total rewards for the week.
● Total reward amount for the week is 7 (days) times 2,931.25 XDB tokens(approximate daily reward) which equals 20,518.75 XDB tokens.
● In this example, your share of reward after 7 days is 1,025.9375 XDB tokens. In the future, this program may establish a KYC requirement at the discretion of the DigitalBits Foundation based on certain factors, including but not limited to the reward distribution size to certain accounts exceeding a certain size. This medium post will be updated from time to time with any program changes.
What is Uniswap?
Uniswap is a highly successful Automated Market Maker (AMM), where users can trade directly from their own wallets in a completely trustless environment. Uniswaphas broken down many barriers within the tokenized landscape, forcing us to rethink the way exchanges operate within the blockchain space.
Uniswap also provides an opportunity for community participation, rewarding contributors with 0.3% of trading fees. We recommended reviewing the Uniswap Documentation in order to familiarize yourself with the protocol prior to using it or participating in this XDB Liquidity Reward Program.
Transactions fees
Given congestion on the Ethereum network, high transaction fees are notuncommon, and can be disproportionate when operating with small amounts. Please take the time to consider fees before conducting any operations on Uniswap.
Impermanent loss
Impermanent loss refers to a disparity in the price of your deposited assets compared to when you deposited them. The larger the divergence, the larger the potential impermanent loss.
This is because of the way that AMMs operate — they always maintain an equal value ratio of both assets in a given trading pair (in this case XDB/ETH). So if ETH has an increase in value it will readjust your position in XDB to maintain the same ratio, and if you withdraw your position, you’ll end up with a higher number of XDB tokens and a lower amount of ETH.
You might also offset the possibility of impermanent loss with the trading fees that accrue for participating in this program by Uniswap, the additional incentives being added by the DigitalBits Foundation and the involvement in the XDB Army program itself. A more detailed overview of impermanent loss can be found here.
Have any questions?
Always do your own research before participating in anything like this. Our community management team and DigitalBits Foundation team members can help to answer any questions in our Telegram group for that.
Disclaimer
DigitalBits Foundation has the right in its sole and absolute discretion to cancel this program at any time and for any reason. Reward distribution to certain accounts will be halted if there has been a determination of any unlawful activity, including but not limited to the determination that the residency of the account holder to be that of a restricted country. This program is governed by the laws of the Cayman Islands.
