FIREDAO LP MINING: GENIUS IDEA
Intro
Liquidity mining is the process of providing liquidity to a decentralized exchange (DEX) or other liquidity pool to earn rewards in the form of additional cryptocurrency or governance tokens. It is a way of incentivizing liquidity providers to keep funds in a pool and ensure a more stable market.
To encourage long-term value investors, FireDAO has devised a liquidity LP mining incentive program for FDT. Each member of the community can lock their FDT main trading pair LP into the liquidity mining pool and participate in mining the incentive token, FLM. The obtained FLM tokens can be exchanged for FDT and gradually unlocked over a span of two years. Distinct mining weight coefficients are assigned based on the duration of the lock-up period. The longer the lock-up period, the higher the mining weight. The protocol leverages the minting of soul-locked tokens, namely SBT-005, to implement specific reward policies.
THE LP PROCESS
During the lock-up process, the protocol generates two types of SBTs: SBT-001 and SBT-005. SBT-001 primarily records comprehensive FDT holdings information within the Soul Account, while SBT-005 primarily documents liquidity mining details associated with the Soul Account. The entire ecosystem distributes FDT ecological incentives in accordance with the position weight ratio of SBT-001 and rewards liquidity mining based on the position weight ratio of SBT-005.
The number of minted SBT-001 tokens depends on the quantity of FDTs locked within the LP and the corresponding weight coefficient during the lock-up period. For instance, if the LP currently contains 10,000 FDTs, locked for 3 months, with a weight coefficient of 3, a total of 30,000 SBT-001s will be minted. Additionally, if the lock-up period matures and the LP needs to be withdrawn from the mining pool, an equivalent proportion of SBT-001 will be burned based on the withdrawn LP's proportion. However, if the lock-up period matures and the LP remains in the lock-up mining pool, the original policy benefits will continue to apply to that order.
The number of minted SBT-005 tokens is determined by the number of LPs and the weight system during the LP lock-up. In the current lock-up scenario, depositing 1 LP allows for the minting of 1,000 SBT-005s. If locked for 3 months with a weight factor of 3, depositing 1 LP would result in the minting of 3,000 SBT-005s. Similarly, if the lock-up period matures and the LP needs to be withdrawn from the mining pool, a corresponding proportion of SBT-005 will be burned based on the withdrawn LPs' proportion.
RESOURCES
https://www.firedao.co/
https://www.firedao.co/fdpapercn.pdf
https://www.firedao.co/fdpaperen.pdf
https://docs.firedao.co/
https://twitter.com/FireDAOlab
https://discord.gg/HjtHk5j6nG
https://t.me/FireDAOEN
https://facebook.com/FireDAO
https://www.tiktok.com/@firedaoofficial
https://www.youtube.com/@FireDAOlab
About the Author
Joseph Johns is a successful Emergency Medicine Physician and an ardent cryptocurrency and Blockchain connoisseur
Bitcointalk Username: Janus23
Bitcointalk Profile: https://bitcointalk.org/index.php?action=profile;u=3528981
Wallet address: 0xc5df5839c467b2d7A69f461979255443A8637955