Liquidity Rewards

Earn liquidity rewards for providing liquidity

Overview

A portion of protocol fees and native token inflation that is captured by block rewards are allocated as incentives to liquidity pools that have been selected via on-chain governance.

This means that liquidity providers (LPs) for these pools can receive additional rewards in addition to the fees earned via maker rebates. Rewards are distributed proportionately to the amount of liquidity provided.

Reward Curve

The amount earned by liquidity pools is governed by the LP reward curve, and is given as a ratio of the each block's rewards.

The reward curve can be found at the following API / RPC endpoint:

Parameters

"start_time": The time at which liquidity rewards will begin to be distributed
"initial_reward": The reward ratio in bps (out of each block's rewards) to be distributed to liquidity pools
"interval": The interval in seconds before the reward ratio is reduced (from initial_rewards)
"number_of_reductions": The number of times that the reward should be reduced
"reduction": The amount in bps to reduce the reward at each interval (as a multiplier to the current reward)
"final_reward": The reward after number_of_reductions reductions have been done
"reductions_made": The number of reward reductions made so far.

Currently, a static 25% of block rewards are allocated to liquidity rewards, for a period of 12 weeks, after which it drops to 0%.

Reward Weights

The reward weight for each pool can be found within the pool API / RPC endpoint here:

The latest proposal on the allocation of LP reward weights can be found here.

The rewards allocated via the above reward curve is split based on the reward weight for each pool.

That is to say, given:

$Wi$ : Reward weight of the liquidity pool $i$ .
$N$ : Total number of liquidity pools.
$Ri$ : Ratio of rewards for liquidity pool $i$ .
$R$ : Total rewards distributed among all pools given by the above reward curve.

The reward weight $Wi$ for liquidity pool $i$ can be expressed as:

$W_i = \frac{R_i}{\sum_{j=1}^{N} R_j}$

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Last updated 1 year ago

Overview

A portion of protocol fees and native token inflation that is captured by block rewards are allocated as incentives to liquidity pools that have been selected via on-chain governance.

Reward Curve

The amount earned by liquidity pools is governed by the LP reward curve, and is given as a ratio of the each block's rewards.

The reward curve can be found at the following API / RPC endpoint:

Parameters

"start_time": The time at which liquidity rewards will begin to be distributed

"initial_reward": The reward ratio in bps (out of each block's rewards) to be distributed to liquidity pools

"interval": The interval in seconds before the reward ratio is reduced (from initial_rewards)

"number_of_reductions": The number of times that the reward should be reduced

"reduction": The amount in bps to reduce the reward at each interval (as a multiplier to the current reward)

"final_reward": The reward after number_of_reductions reductions have been done

"reductions_made": The number of reward reductions made so far.

Currently, a static 25% of block rewards are allocated to liquidity rewards, for a period of 12 weeks, after which it drops to 0%.

Reward Weights

The reward weight for each pool can be found within the pool API / RPC endpoint here:

The latest proposal on the allocation of LP reward weights can be found here.

The rewards allocated via the above reward curve is split based on the reward weight for each pool.

That is to say, given:

$Wi$ : Reward weight of the liquidity pool $i$ .

$N$ : Total number of liquidity pools.

$Ri$ : Ratio of rewards for liquidity pool $i$ .

$R$ : Total rewards distributed among all pools given by the above reward curve.

The reward weight

Wi​

for liquidity pool

i

can be expressed as:

W_i = \frac{R_i}{\sum_{j=1}^{N} R_j}