Pool weights directly affect liquidity providers’ income. Farming rewards (1 million SWOPs during this year, or about 1.9 SWOPs every minute) are distributed among farming pools in proportion to their weights (see details in the SWOP is here article). Pool weights are governed by SWOP stakers.
Voting for pool weights is an essential procedure. A vote establishes which farming pools will bring more significant revenue over the following week. These pools will be the most attractive for liquidity providers. Therefore, vote results will largely determine further development of the project.
When choosing pools you will vote for, consider their worth to Swop.fi in general:
- Pools that generate the most exchange fees are the most lucrative, as 40% of the fees go to the SWOP buyout: 35% become the SWOP staking rewards and 5% come into the treasury.
- Stablecoin pools serve an infrastructure function: specifically, they reduce the entry threshold for new users who come from other blockchains with such coins as USDT and USDС.
Voting results are counted once a week and set the pool weights for the next 7 days.
How to vote
To be able to vote, first, stake your SWOP tokens in the Governance → Staking tab.
You will get gSWOPs that enable voting for pool weights.
Voting for pool weights is ongoing: you can vote once, and your vote is automatically taken into account in all subsequent votes until you change it.
For example, if you have 200 gSWOP and voted for the SWOP-USDN pool with all of them, you cannot vote for other pools until you change this number or stake more SWOP. If you vote with 100 gSWOP for this pool, you can split the remaining 100 gSWOP between other pools: say, 70 gSWOP for WAVES-USDN and 30 gSWOP for NSBT-USDN.
Please keep in mind that you cannot unstake SWOPs if their matching gSWOP are in voting. You have to cancel or reduce your vote first. Also note that any unstake operation resets the bonus gSWOPs to zero.
How the results are counted
The weight of a farming pool is determined by the voting results and the pool’s trading volume.
At the end of a voting period, Swop.fi sums up the total amount of gSWOP voting for the pool weight and multiplies by the pool’s weighting factor:
Pooled SWOP tokens are counted as the same amount of gSWOPs voting for the weight of their pool. More about this in the article Self Boosting: SWOP pools get weighted.
During the First Harvest week and the week following it, the pool’s weighting factor is 1. Otherwise, the factor depends on the pools’ trading volume:
Next, the vote powers modified by the weighting factors are summed up for all pools, and finally the pool weights are calculated:
Thus, pools with a low trading volume that bring few fees generate less SWOP by farming. Liquidity providers of those pools continue to receive income from swap fees, Neutrino staking, and WAVES leasing in full.
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