Difference between revisions of "Liquidity Mining"

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For the decentralized exchange on DeFiChain to work correctly, investors must provide liquidity to both sides of the liquidity pools, which is known as "liquidity mining."  
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[[Liquidity Mining DE|Deutsche Version]]
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For the decentralized exchange on DeFiChain to work correctly, investors must provide the same value of liquidity to both sides of the liquidity pools (e.g. 50$ DFI + 50$ dBTC). That is known as "liquidity mining."  
  
 
To incentivise liquidity providers, they earn two different types of revenue in compensation for price volatility, which may cause [[Impermanent Loss|impermanent loss]]:
 
To incentivise liquidity providers, they earn two different types of revenue in compensation for price volatility, which may cause [[Impermanent Loss|impermanent loss]]:
* DFI rewards per block (which are currently being awarded due to the fact that there is not currently enough swap commissions to provide the appropriate rewards to the liquidity providers.
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* DFI rewards per block which are currently being awarded due to the fact that there is not currently enough swap commissions to provide the appropriate rewards to the liquidity providers.
* Fees for each swap on the Decentralized Exchange (DEX)
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* Fees/Commisions for each swap on the Decentralized Exchange (DEX)
  
 
== Block rewards ==
 
== Block rewards ==
At the moment, 45 DFI out of 200 DFI per block are used to pay the liquidity providers. With DeFi Improvement Proposal 3 (DFIP 3) this amount was increased by 55 DFI/block from the original fixed airdrop amount. Additionally, the dLTC and dBCH pools will be rewarded from the airdrop amount. The remaining DFI amount can be found on this address:  <br>[https://dex.defichain.com/mainnet/address/8UAhRuUFCyFUHEPD7qvtj8Zy2HxF5HH5nb 8UAhRuUFCyFUHEPD7qvtj8Zy2HxF5HH5nb] <br><br>The dDOGE pool is a marketing campaign and is rewards are mostly paid by Cake and some DeFiChain community members. The block reward is provided from this address: [https://dex.defichain.com/mainnet/address/dbzD1wUTqb1WQLHv9jz5M2fMF1h9VqaXyK dbzD1wUTqb1WQLHv9jz5M2fMF1h9VqaXyK] <br><br>With this we are getting the following block rewards for liquidity miners. The values in brackets are the rewards after the balance of the mentioned addresses reached zero: (this section has become outdated, waiting for more information)
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[[File:Regular block-reward reduction.png|thumb]]
Block Rewards for Cryptoasset Liquidity Pools ("d" in front of the cryptoasset, or any other asset for that matter, simply is a symbol showing that the cryptoasset is not native but rather a DeFiChain token which is backed by collateral)
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The emission of the block rewards changes regularly. Approximately every 11 days we have a decrease of 1.6%. The current valid distribution can be found on the DeFiChain-Analytics-Website. Just click the following link https://www.defichain-analytics.com/general?entry=emission<br><br>Block rewards for dToken Liquidity Pools (e.g. dTSLA-DUSD; dURTH-DUSD,..) need to be re-adjusted every month as we ususally get 4 new dToken into the ecosystem. The distribution is currently decided by a group of DeFichain-Contributors, the so-called ticker-council, as we do not have a decentralized solution for that yet. You can find the current reward-distribution [https://www.krypto-sprungbrett.com/stock-token-apr/ by clicking this link]
{| class="wikitable sortable"
 
!(rewards are given in DFI/block)
 
!dBTC-DFI
 
!dETH-DFI
 
!dUSDT-DFI
 
!dLTC-DFI
 
!dBCH-DFI
 
!dDOGE-DFI
 
!DUSD-DFI
 
|-
 
|Block Rewards
 
|80
 
|15
 
|5
 
|2
 
|1
 
|1
 
|?
 
|-
 
|Bracketed Block Rewards
 
|36
 
|6.75
 
|2.25
 
|0 starting 9/2/2021
 
|0 starting 17/3/2021
 
|0.1 starting 28/2/2021 '''tbd'''
 
|?
 
|}
 
Except for the DOGE pool, there is a countdown calculating the remaining blocks based on the address balance. The block count together with the average blocktime gives the expected duration for the high block rewards (cf. [https://www.cakedefi-review.com/DefiChain?tab=overview here]).
 
 
 
Block Rewards for Individual Stock Liquidity Pools
 
{| class="wikitable sortable"
 
!(rewards are given in DFI/block)
 
!dTSLA-DUSD
 
!dGME-DUSD
 
!dAAPL-DUSD
 
!dBABA-DUSD
 
!dGOOGL-DUSD
 
!dPLTR-DUSD
 
!dNVDA-DUSD
 
!dAMZN-DUSD
 
!dCOIN-DUSD
 
|-
 
|Block Rewards
 
|?
 
|?
 
|?
 
|?
 
|?
 
|?
 
|?
 
|?
 
|?
 
|-
 
|Bracketed Block Rewards
 
|?
 
|?
 
|?
 
|?
 
|?
 
|?
 
|?
 
|?
 
|?
 
|}
 
Block Rewards for Other Assets' Liquidity Pools
 
{| class="wikitable sortable"
 
!(rewards are given in DFI/block)
 
!dSPY-DUSD
 
!dQQQ-DUSD
 
!dARKK-DUSD
 
!dSLV-DUSD
 
!dTLT-DUSD
 
!dGLD-DUSD
 
!dPDBC-DUSD
 
!dVNQ-DUSD
 
!dURTH-DUSD
 
!dEEM-DUSD
 
|-
 
|Block Rewards
 
|?
 
|?
 
|?
 
|?
 
|?
 
|?
 
|?
 
|?
 
|?
 
|?
 
|-
 
|Bracketed Block Rewards
 
|?
 
|?
 
|?
 
|?
 
|?
 
|?
 
|?
 
|?
 
|?
 
|?
 
|}
 
 
 
 
== Commissions from DEX users ==
 
== Commissions from DEX users ==
The second, currently smaller, part of the revenue comes from commissions from DEX users' swaps. From every swap a fee of 0.2% of the given coin is deducted and distributed proportionally to the liquidity providers.  
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The second, currently smaller, part of the revenue comes from commissions from DEX users' swaps. From every swap a [[DEX Fee structure|fee]] of the given coin is deducted and distributed proportionally to the liquidity providers. The target is getting much more trading on the DEX in the future. So the regular decrease of block rewards should be compensated by increasing commissions in the future. So there will still be an incentive for providing liquidity after the block rewards are gone.
 
 
There is also an evaluation of the total fee amount on a daily basis [https://www.cakedefi-review.com/DefiChain?tab=DEXFees (Cake DeFi Review)].
 

Latest revision as of 18:25, 23 October 2022

Deutsche Version

For the decentralized exchange on DeFiChain to work correctly, investors must provide the same value of liquidity to both sides of the liquidity pools (e.g. 50$ DFI + 50$ dBTC). That is known as "liquidity mining."

To incentivise liquidity providers, they earn two different types of revenue in compensation for price volatility, which may cause impermanent loss:

  • DFI rewards per block which are currently being awarded due to the fact that there is not currently enough swap commissions to provide the appropriate rewards to the liquidity providers.
  • Fees/Commisions for each swap on the Decentralized Exchange (DEX)

Block rewards

Regular block-reward reduction.png

The emission of the block rewards changes regularly. Approximately every 11 days we have a decrease of 1.6%. The current valid distribution can be found on the DeFiChain-Analytics-Website. Just click the following link https://www.defichain-analytics.com/general?entry=emission

Block rewards for dToken Liquidity Pools (e.g. dTSLA-DUSD; dURTH-DUSD,..) need to be re-adjusted every month as we ususally get 4 new dToken into the ecosystem. The distribution is currently decided by a group of DeFichain-Contributors, the so-called ticker-council, as we do not have a decentralized solution for that yet. You can find the current reward-distribution by clicking this link

Commissions from DEX users

The second, currently smaller, part of the revenue comes from commissions from DEX users' swaps. From every swap a fee of the given coin is deducted and distributed proportionally to the liquidity providers. The target is getting much more trading on the DEX in the future. So the regular decrease of block rewards should be compensated by increasing commissions in the future. So there will still be an incentive for providing liquidity after the block rewards are gone.