We are pleased to announce that Iagon is planning to launch a unique liquidity rewards program designed to recognize token holders who offer liquidity on recently added DEXs. The program is scheduled to begin on April 21, as announced.
It will unleash its power on the DEXes Minswap and Wingriders and the LSPO (Liquidity Stake Pool Offering) pool in partnership with Norwegian crypto exchange NBX & ADAnorthpool for additional rewards for those who participate.
In this article, we aim to clarify everything you need to know about the upcoming program and how you can participate.
We strive to offer competitive reward structures that attract dedicated Liquidity Providers (LPs) and support the ongoing decentralization, growth and development of our ecosystem. It is important to note that such initiatives also contribute to the wider adoption of the Cardano blockchain. Our aim is to continue these efforts in the long term.
In recent months, the Iagon team has focused on developing the mechanism for the Liquidity Reward Program.
What are liquidity premiums?
Let’s dive into the exciting world of liquidity pools, a crucial component of the decentralized finance (DeFi) ecosystem! These pools are reserves of cryptocurrencies locked in smart contracts and used for crypto exchanges. Each liquidity pool consists of two tokens, hence the nickname “pair”.
The creative minds behind these pools implement smart contract-based designs that allow them to operate as decentralized exchanges using the Automated Market Maker (AMM) model. Unlike traditional order book exchanges, crypto is traded through smart contracts, not with other users. Exchange rates are determined by mathematical formulas, creating a transparent and unbiased marketplace.
Liquidity Providers (LPs) are rewarded with shares in the pool equal to the size of their deposit. A transaction fee is charged on each swap and distributed among the LPs in proportion to their share of the total liquidity. It’s a sophisticated system that benefits both LPs and dealers alike.
What sets our Liquidity Rewards program apart?
Our liquidity reward program is designed to motivate our community to increase IAG/ADA liquidity. As an added bonus, participants who provide liquidity and delegate their tokens to our LSPO (Liquidity Stake Pool Offering) receive exclusive loyalty bonuses.
Our goal is to encourage our community to take an active role in growing our ecosystem while rewarding their engagement and support.
Key highlights of the upcoming program:
- We have committed an incredible 30 million IAG tokens to our liquidity program. Participants are rewarded based on the liquidity provided and the duration of their participation.
- After the program is finished, The awards are distributed over 12 months to ensure continued engagement and benefits.
- Participants in the LSPO receive additional IAG awards, increasing the overall value of the program. Collected ADA from the pool will be used by the Iagon team for further program improvements (85% of LSPO’s ADA rewards will be used to provide liquidity, with half of the funds going to buy $IAG tokens. The remaining part used by team IAGON and may be used for liquidity providers in the future.)
- Get ready for something very special – We will be revealing exclusive NFT rewards in the near futureso keep your eyes peeled for more details!
Where to use to be rewarded?
There are two primary ways to participate in the Liquidity Rewards Program:
- Provide ADA tokens to the LSPO pool by delegating them to the pool address (IAGL1, pool ID: pool1ztk6dcj2nc3plnujf3ek6jqngtx8hcryufz56lyumemlcy2xxn0 – link is here). This gives you additional IAG premiums from the liquidity program.
- Provide both ADA and IAG tokens in the verified pools of our partner DEX. This gives you rewards from the liquidity program in proportion to your share of the total liquidity. Be sure to look out for verified pools to ensure the safety of your funds. Start earning rewards now and contribute to the growth and success of the Iagon ecosystem!
As mentioned before, we will be working with several DEXes – Minswap and Wingriders. To join, visit their website and look for the verified pools to start earning rewards.
Additionally, there will be an LSPO pool in partnership with Norwegian crypto exchange NBX and ADAnorthpool. Those who delegate there are rewarded with additional bonuses.
Our official Liquidity Stake Pool is already active. Check correct name – it’s IAGL1 – link is here.
Our commitment to the safety of our pool runs deep. We have left no stone unturned to protect against potential supply chain attacks. We rigorously tested for privilege escalations and subjected our pool to multiple rounds of security reviews.
Our efforts don’t stop there; We constantly monitor our pool’s performance metrics through automation and vigilant oversight. We even went a step further by setting up time synchronization devices and redundancies to ensure our pool runs like a well-oiled machine.
We take our responsibilities seriously and our users can rest assured that their assets are protected at all times.
Liquidity Premium Calculator
Another thing worth noting is that we are excited to launch our Liquidity Rewards Calculator. It will be open to the public soon. Stay tuned with updates.
With just a few clicks, you can see how your posts are rewarding you over time based on several parameters:
- Your stake period (length of time you stake your liquidity in the pool)
- Amount you bet
- Amount you delegate to the LSPO pool (IAGL1)
This powerful tool takes the guesswork out of calculating your potential rewards and makes it easier for you to understand the benefits of joining our program.
How are rewards calculated?
We understand that not everyone is interested in the technicalities and complex calculations that go into our Liquidity Rewards program.
That’s okay because we’re here to make it as easy as possible for you. If you just want to participate and earn rewards for your liquidity, you can skip the jargon and focus on the simple steps of providing liquidity.
We want everyone, regardless of their level of technical expertise, to be able to participate and benefit from this program. So don’t worry if you’re not a techie – we’ve got you covered!
But below you can check technical and mathematical details of how the rewards are calculated. We will use such a reward calculation function that would meet the following requirements:
- promoting longer embargoes;
- promoting higher locking volumes;
- Allow unlocking at any time (not necessarily continuously, maybe once per epoch);
- Providing an increase in reward value (calculated in USD)
- Monitoring the amount of tokens issued as rewards worldwide (the closer we get to the 0.5-3% limit, the slower the reward rate increases);
- Providing an extra boost for people delegating tokens under the LSPO.
The first two requirements suggest that the reward function should be super-linear in terms of time and volume (if it were linear, there would be no difference between locking for many shorter periods and one longer period; the same is true for amounts locked). If we look at the way continuous compound interest is handled, we could propose an exponential relationship, i.e.:
Where:
- A0 is the set of blocked tokens,
- t0 is the time the tokens were blocked,
- T is the moment of unlocking,
- Vt is the value of the token (e.g. in USD) at the time of activation
(We divide by this to make growth exponential in terms of value, not token quantity). - A the degree of ag is about 1.2m, but this needs to be determined),
- B is the (also to be determined) growth coefficient.
Now, formula (1) makes sense when the total amount of tokens issued as a reward is well below the cap. As it nears that point, we need to start curbing exponential growth. The idea is to multiply the exponential component by another function that starts at 1 but tends towards 0 when we reach the limit. An idea for such a function is:
Where:
- No is the total number of tokens issued as rewards so far,
- N max is the maximum allowed amount of tokens provided for rewards (i.e. 0.5-3% of total token supply at the moment),
- C is the damping coefficient (higher values of γ make this component stay near 1 longer, at the price of a steeper rise as we approach the limit; lower values would make the initial fall more drastic).
Finally, we need another multiplicative term that reflects a person’s participation in the LSPO. For someone who does not participate, this term should only be 1 and should not affect the total reward. For participants, it makes sense to look at their relative contribution (percentage). Two open questions (reflected in two additional parameters) are:
- What is the maximum premium increase for a hypothetical case of a single participant?
- How should the increment due to LSPO participation grow with an increasing percentage? Should it be linear, sublinear, superlinear?
This leads us to the following candidate function:
Where:
- Pd is the fraction of an individual’s delegated tokens compared to the total volume (a real number between 0 and 1),
- e is the coefficient that determines how the LSPO increment depends Pd (a e of 1 would imply a linear relationship, higher values would disproportionately favor high percentages, and lower values would favor moderate participation),
- D is a coefficient that limits the maximum reward boost due to participation in the LSPO (if D is small, a hypothetical single LSPO participant would see a dramatic increase in their reward; if it is large, the LSPO effect on the total premium is negligible; D ≈ 2 means in extreme cases an increase by a factor of 1.5).
The final reward function is the product of (1), (2) and (3):
For more information and other updates, please follow us on our social media or visit the IAGON website!
Learn Crypto Trading, Yield Farms, Income strategies and more at CrytoAnswers
https://nov.link/cryptoanswers
Comments are closed.