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
