Yield Farming
Yield Farming is an initiative used by protocols in DeFi to incentivize liquidity and utilization by rewarding users in governance tokens (such as MIN). The idea is to acquire users by giving them ownership of the protocol itself, in accordance with the ethos of decentralized protocols that are wholly owned by their users.
In Minswap, this translates to distributing MIN token rewards to users who Provide Liquidity on our DEX and stake their Liquidity Provider Tokens (LP Tokens or LPTs). Staking LPTs will earn you MIN rewards in proportion to how much the share the LPTs you are staking is compared to the total LPTs staked in the particular farm. Minswap will aim to have an effective system for farming yield, while also offering the best user experience.
During the first 5 months after deployment of the DEX, Minswap went through a Bootstrapping Phase using a predictable and aggressive Yield Farming Schedule to bootstrap users and TVL.
1st month (16th March 2022 to 15th April) : 1.2% total supply = 60 million MIN ≈ 2,000,000 daily.
2nd month (15th April 2022 to 15th May) : 1.1% total supply = 55 million MIN ≈ 1,833,333 daily
3rd month (15th May 2022 to 14th June) : 1% total supply = 50 million MIN ≈ 1,666,666 daily.
4th month (14th June 2022 to 14th July) : 0.9% total supply = 45 million MIN ≈ 1,500,000 daily.
5th month (14th July 2022 to 13th August) : 0.8% total supply = 40 million MIN ≈ 1,333,333 daily.
In total, to bootstrap liquidity and to ensure early supporters of Minswap are maximally rewarded, 5% of total supply was allocated towards Yield Farming in the first 5 months. We welcome any community input regarding pools that could be added and schedule adjustment in our Forum.
After the Bootstrapping Phase, the Minswap DEX will enter the "Minimax Phase" with a Dynamic Schedule approach for a 4-month Period meaning from August 13th 2022 to November 13th 2022. While at first this process will be conducted off-chain, the endgame of a Dynamic Schedule would be to have the Emissions Schedule be determined completely on-chain and for Emissions to be determined according to an algorithmic formula coupled with on-chain voting.
During the 4 months of the Minimax Phase for the Dynamic Schedule, Emissions will be increased or decreased within a 50% threshold of the last Emissions Rate of the first Farming schedule, meaning the Starting Emissions Rate (SER) of ≈ 1,333,333 $MIN emitted daily from July 14th to August 13th. This means Emissions will be increased to a maximum rate of ≈1,999,999 $MIN daily, or decreased to a minimum rate of ≈666,666 $MIN daily. None of those two scenarios must or will necessarily occur, but those are the bounds set during the Minimax Phase.
Once the Minimax Phase is over, with the first Emissions Report released, and provided Governance infrastructure is ready by then, the Minswap DAO will have to vote on whether to continue a Dynamic Emissions Path and if so, what structure to pursue within a Dynamic Emissions Path.
Last modified 6mo ago