Flux Liquidity Mining Update

This update is regarding the changes we are making to liquidity mining. This change will accomplish the following objectives:

  • Better align the APY rewards to the pool size and traction
  • Decrease the amount of circulating supply entering the market each month
  • Decrease sell pressure from liquidity mining rewards
  • Increase price stabilization and discovery

To start, a bit of background – the liquidity mining program was designed to create incentives with the following goals:

  • Create deep liquidity pools on Uniswap, Ref Finance, and Trisolaris
  • Create an incentive mechanism for users to provide liquidity
  • Target pool sizes of over $10m-$20m with between 20-25% end APY per DEX

We have let this program run for three months and have observed the following:

  • Pool sizes are under subscribed meaning that APY ranging between 250-400% was the normal average for earning potential
  • The majority of rewards were sold immediately having a negative impact on the price of $FLX across Dexes
  • The majority of staking is large holders that are accumulating large amounts of $FLX, leading to a group of addresses receiving the majority of the rewards

We are altering the program with the following mechanics:

Each month $FLX reward amounts will decrease by the following increments:

This depreciation will make the effective APY the following on average:

Uniswap average APY: 78.54%
Trisolaris average APY: 112.32%
Ref Finance average APY: 149.84%

Distribution percentages:

Uniswap – 50% of rewards
Trisolaris – 25% of rewards
Ref Finance – 25% of rewards

Calculations made at current pool size