Deep Dive: OraiDEX Co-Harvest for ORAIX Holders
The Keynote 2024 presentation unveiled Co-Harvest, a novel mechanism designed to directly deliver value for token holders within the Oraichain ecosystem. This exploration delves into its immediate application to OraiDEX, providing ORAIX holders with the opportunity to reap revenue from platform fees. We’re diving deep to unpack how this innovative approach functions.
The Oraichain ecosystem witnessed substantial growth in 2023, particularly in its DeFi offerings. This year marked OraiDEX’s transformation from a basic Automated Market Maker (AMM) to a sophisticated multi-chain trading platform, equipped with a diverse array of tools to support various trading strategies. Innovations like Universal Swap, Order Book, and Perpetual Futures have not only enriched the platform but also significantly boosted its revenue streams.
To enhance the utility of the ORAIX token, we’re thrilled to introduce the OraiDEX Co-Harvest. This initiative enables holders to extract tangible value from OraiDEX while fostering sustainable long term incentives for liquidity providers. With this mechanism:
- ORAIX will be used to bid on USDC in the Harvest Pool.
- At settlement, winners will receive USDC and their ORAIX will be recycled out of the CS and back to the vested supply for future LP incentives.
On December 5, 2023, the first Harvest Pool began accruing rewards. In this short time, OraiDEX has already generated more than $20K in total revenue, resulting in more than $8K contributed to the inaugural Co-Harvest. As OraiDEX continues to amplify its revenue channels in 2024 and ventures into AI services, ORAIX holders are positioned to gain substantially and contribute meaningfully to the platform’s growth.
Let’s delve into the specifics of how the Co-Harvest mechanism on OraiDEX will operate.
Co-Harvest for ORAIX Holders
Harvest Pool: 40% of all fees generated via OraiBridge, order book, and futures trading are deposited into the Co-Harvest pool every 24 hours in USDC. This transparent system allows users to continuously monitor the accrual process.
Bidding: During the accrual period, ORAIX holders can enter bids, joining pools at various discount tiers ranging from a minimum of 5% to a maximum of 25%, to participate in the auction for USDC fees. This opportunity is open to all ORAIX holders, irrespective of the number of tokens they possess.
Auction Settlement: The settlement price is determined at the auction’s close, based on the ORAIX/USDC price feed. Bids are fulfilled in a first-come-first-serve manner, starting from the top.
Frequency: Co-Harvest auctions are held bi-weekly. Once an auction concludes, the next immediately begins accumulating fees. Any remaining funds post-auction are rolled over to the next Co-Harvest pool.
Recycled ORAIX: ORAIX tokens from winning bids are withdrawn from circulation and recycled into the unissued supply, earmarked for future LP incentives.
Sustainability for OraiDEX LP Incentives
The Co-Harvest mechanism represents a groundbreaking development in Oraichain economics, enhancing sustainability in vital areas pivotal to long-term growth and security. While ORAI Co-Harvest replenishes rewards for delegators and validators, supporting long-term security, OraiDEX’s Co-Harvest creates a sustainable pool of rewards for LP incentives. Coupled with real yield from swap fees, liquidity providers can enjoy consistent rewards, thereby contributing to protocol growth.
Furthermore, Co-Harvest bolsters ORAIX value, spurring demand with each auction and continuously recycling tokens from the circulating supply for future incentives. This strategy provides a compelling reason for holders to farm and retain ORAIX tokens, maximizing value extraction from OraiDEX’s overall growth.
Resolving Proposal #200 and #201
Implementing OraiDEX’s Co-Harvest will significantly bolster the utility of the ORAIX token. Slated for introduction in January, this feature will allow the team to swiftly address the DAO’s decision in Proposal #200, eliminating ORAI as a bonus incentive from all pools. Consequently, all liquidity providers will benefit from real yield and ORAIX incentives for their liquidity contributions.
What’s Next?
We are incredibly optimistic about the future of OraiDEX and the ORAIX token. With the imminent launch of Co-Harvest, we eagerly anticipate the enhanced value and opportunities it will bring to our community. As we finalize development and testing, we will be updating the community on OraiDEX revenue, Harvest Pool growth and new features that will boost the Co-Harvest bounty. Stay tuned for more!
