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MeowSwap Technical Series: Staking Rewards

Fellow Meowswappers! We would like to present the preliminary staking mechanics of our platform for your consideration. We have created what we believe to be a fair and robust system for rewarding our dedicated node operators, liquidity providers and holders.

Saying this, we value our community’s opinion on any and every aspect of the operation of the ecosystem, so please — enjoy the article and send us your valued feedback.

On to the rewards!

MeowSwap Commission distribution

Every trade on MeowSwap DEX is charged a 40 basis points fee (0.4%). From these accumulated fees 25% of tokens (10 basis points = 0.1% of every transaction) is used to periodically buy MEOW tokens off the Market and deposit them into the Rewards pool. Another 75% of trading fees stay in the pool thus increasing total pool liquidity in the long run and are credited to people running liquidity pools increasing the size of their pools proportionally.

Staking process timeline:

  1. MeowSwap exchange commissions (0.1% of every trade) are used to buy MEOW tokens which are then placed in the rewards pool.
  2. xMEOW tokens are earned by staking MEOW tokens, operating a MeowSwap Node and Liquidity providing.
  3. The rewards are claimed by exchanging xMEOW back for MEOW tokens which are found in the rewards pool.

Earn xMEOW with Staking

40,000 xMEOW tokens are distributed daily to every staker of MEOW tokens — in proportion to the individual’s MEOW stake. MEOW token stakers have an option to select the Nodes they trust to operate the MeowSwap calculations.

Earn xMeow’s by Node Operation

Node operators receive xMEOW tokens for their assistance in maintaining the DEX operation. The node operators’ reward is 10 000 xMEOW tokens which are distributed equally across all node operators. The MeowSwap DEX does not require a large quantity of nodes to operate optimally but it is imperative that the Nodes are of high quality — to ensure smooth operation of MeowSwap.

So as the amount of Nodes increases limitations to stake power and node speed will be introduced to be able to get rewards.

Earn xMeow’s by providing liquidity

Pools that have been designated by the MeowSwap protocol are eligible for liquidity providing xMEOW rewards.

For example:

Specified pool has been determined to receive xMEOW rewards. MeowSwap pool operators, which provided said pool liquidity will receive their share of xMEOW tokens which are distributed daily according to the pool values of each pool operator. If said pool is rewarded 150.000 xMEOW, specific pool operator which provided PoolOperatorPoolValueProvided liquidity value is eligible for PoolOperatorDailyAward xMEOW on daily basis where:

Claiming MEOW tokens from the rewards pool

Claiming MEOW tokens from the rewards pool is possible by exchanging xMEOW tokens for MEOW tokens by burning the xMEOW. The xMEOW to MEOW exchange is calculated according to the following formula:

This means that 5% of MEOW tokens from each xMEOW to MEOW exchange — are left in the rewards Pool and each unclaimed xMEOW token will provide a user with more MEOW tokens. Consequently, the longer you hold xMEOW tokens, the higher the reward will be per each xMEOW token you have.

The aforementioned also means that xMEOW tokens that are earned during a period of low trading volume — could provide a user with much more MEOW tokens, if they are claimed later — as the quantity of commissions is expected to increase with time and Cardano’s ecosystem growth.

Additional rewards for Liquidity Miners

Aside from the xMEOW reward mechanism, everyone has the opportunity to earn additional rewards via liquidity mining. Liquidity mining provides rewards in MEOW tokens and the second token in the exchange pool which is being liquidity mined.

The formula for liquidity rewards is as follows:

Daily rewards distributed between liquidity pool providers: X * remaining rewards

Parameter X is determined by the MeowSwap project.

This means that the rewards pool added to liquidity providers drops each month by y% defined by x value of all the rewards in the pool by the start of the month and rewards get smaller each month, but never really stop.

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MeowSwap

MeowSwap

First working DEX on Cardano.