Wombat Liquidity Mining — Optimize Rewards in the Boosting Pool
How to get the most out of your investment through boosting?
In a previous article, we briefly tackled the boosting pool, its reward mechanism, and factors to consider in sustaining yield. Today, let’s dive a little deeper into this! Examples are given below to help you better understand the concept and make it work for you.
The Rewards Equation
The following equation illustrates the rewards earned through deposits in the Boosting Pool:
The “w” in this equation is the weight. Weight is calculated with the following equation:
If that made your head hurt, don’t worry! We’ll explain it more as we go.
The Longer, The Better… And The More, The Merrier!
In the Boosting Pool, you earn veWOM through locking your WOM. veWOM is basically a nickname for voting escrow WOM. The concept is the same as Curve’s veCRV. Locking any amount of WOM applies a boost to all stablecoin pools, and APR will vary based on your position and the actions of other users.
The equation below is the veWOM rewards calculation for locking WOM. The main gist is that the more WOM you lock, the more veWOM you earn. Also, the longer you lock your WOM, the more veWOM you get.
The table below shows how much veWOM you earn from locking 10,000 WOM for 7 days to 4 years. Once again, the longer you lock, the more you earn.
For users who are not into locking for a long time, you can take advantage of the amount of WOM deposited instead for maximizing veWOM earnings. This table below shows WOM locked for a year in varying amounts.
Assuming the total veWOM supply is fixed, the more veWOM you have, the higher your boosting weight is, hence, more boosting rewards!
A Few More Factors You Need To Look Into
Change in the total veWOM supply
Apart from total deposits, the total veWOM supply also plays a crucial factor in the total pool weight, illustrated by the following examples:
Change in total deposits
Same as base pool rewards, the amount of the total deposits affects the total pool weight, which leads to a decrease in your boosting rewards when the total deposits increase.
To guarantee a higher reward share, deposits and veWOM have to grow at a higher rate than the aggregate deposits. While the factors mentioned above are not under your control, it is helpful for strategizing to know that rewards will diminish if your deposit remains the same while more stablecoins are staked in our liquidity pool or if your veWOM amount remains the same while more WOM is locked aka more veWOM supply.
- Lock more WOM or lock it for longer to earn more veWOM. It yields more WOM rewards from the Boosting Pool.
- Be aware of the linkage of the total deposits, total veWOM supply, and the boosting weight.
- To keep up with the reward rate, your strategy needs to grow your deposits and veWOM amount accordingly to the aggregate deposits.