The time has come! Today marks the first since the initiation of liquidity provider incentives to the WLEO - ETH pool on Uniswap.
We've talked about the LP incentives program (a.k.a. 300,000 LEO bounty), but this post will likely drive home the way that this program works. A lot of users have asked a lot of questions about the structure of these incentives.
In short, LP incentives are distributed to WLEO - ETH liquidity providers on Uniswap. The initial incentive pool contains 300,000 LEO. This 300,000 LEO pool will be distributed over the first 90 days of the pool (starting 7 days ago and ending 83 days from today).
The LP incentives for week 1 brought in an annualized return of 138.39% for liquidity pool providers.
As of today, the WLEO-ETH pair on Uniswap has $335,000 USD in total liquidity, has traded $30,724 in volume over the last 24 hours and the LP's split $92.17 in fees over the last 24 hours.
Other key features of the LP program:
- HiveLink: Some details about how we do this have been published in previous posts. The following table displays HiveLink and either "TRUE" or "FALSE".. if TRUE, then your Hive account is linked to your ETH address and you'll receive bounties paid out as LEO on the Hive blockchain. If FALSE, then you'll receive the LP incentives straight to your ETH address
- Snapshot: (#1, #2..) These represent the daily snapshot that is taken on the Ethereum blockchain. It records your LP position against the total pool as a %. Then it takes that % against the daily LEO incentive pool (3,333.33 LEO per day) less the official LP stake held by @leofinance
- The following chart displays the daily LEO that each account earns from the total pool. #1 indicates day 1 of the incentive program. #7 is today's snapshot (day 7)
Frequently Asked Questions:
If I add to my existing LP balance, will it reflect in my daily distribution of LEO from the bounty pool?
Yes. If you add WLEO - ETH to your LP position at any time, then the next snapshot will reflect your new position.
If I remove from my existing LP balance, will I lose all my LP incentive rewards?
No. You will only be excluded after the next snapshot. Your position is updated at the time of each snapshot and additions or removals of part or all of your LP position are reflected each day.
How do I link my Hive account to my ETH address to receive LP bounties on Hive rather than Ethereum?
Linking is easy, all you have to do is wrap LEO before you provide liquidity to the LP. If you provide liquidity prior to wrapping any amount of LEO, then you won't be linked. You don't have to wrap all the LEO that you use to provide liquidity.. Just any amount of LEO before you've provided any liquidity (i.e. you could wrap 50 LEO to your ETH address in order to link it to Hive.. then you could buy 5,000 WLEO on Uniswap and provide 5,050 WLEO to the liquidity pool and your Hive account will be linked for that total amount).
Note: We can link you manually using an ETH verification TX. If you see your address above and it is not linked, you can send a message on #tech-support in our Discord server and we'll help you out.
When will the first LP bounty payout occur?
For HiveLinked addresses, you'll receive your first payout 7 days from today (every 2 weeks) as LEO sent to your Hive account.
For non-linked addresses, you'll recieve your first payout ~21 days from today (every 4 weeks) as WLEO sent to your ETH address.
If I provide liquidity now, will I miss the LP incentives?
No. You'll be added to the bounty pool on the next snapshot date and will receive the snapshot payout each subsequent day based on your LP position in real-time.
What happens after the 90 day LP incentive program ends?
More details at the end of this post. We're working on a long-term issuance schedule to reward LP's (although, it won't be quite as high as a 138% annualized yield 😉).
Week 1 Totals & Yield Farming
*Before jumping into the chart. The Annualized Yield reflects the ending week balance against the total LEO $ rewards earned throughout the week. The return for users who deposited to the LP on day #1 and never added/removed liquidity is 138.39%.
This annualized return is impacted if the user has added/removed liquidity within that 7 day period of time (since we tallied the totals as of today as opposed to weighting it throughout the week). The annual return for LP incentives based on $ invested in the pool is 138.39% today.
If you have any questions about this, feel free to get in touch with the community in the comments below, Telegram, Discord or Twitter and we'll help you out.
|Address||Week 1 (LEO)||Week 1 (USD)||Current Pool Value||Annualized Yield*|
The Long-Term: How Do We Incentivize LP's After the 90 Days?
One of the main questions we see is about the long-term sustainability of LP incentives and how we will continue to incentivize LP's to buy WLEO and contribute to the pool on Uniswap.
The first 90 day bounty is simply to kickstart the pool on Uniswap. Considering the size of WLEO-ETH on day #7, I think we're doing relatively well in that respect.
Over the coming weeks, we'll develop a long-term issuance schedule which will sustainable reward LPs (on top of the normal fees that they earn for providing to the pool - which is around 9-12% APY on its own as of today).
The goal is to have a "reasonable" APY when compared with curating content with staked LEO on our platform (20-30%). Ideally, we'll create a setup where the average APY for curating is just slightly higher than providing liquidity. Since curating is intended to be a manual endeavor and more "sweat equity" oriented and being an LP is a largely passive investment.
If you're familiar with DeFi, then you'll recognize the term Geyser. We're researching systems like this and considering different ways we can implement LP staking which would allow LPs to earn additional incentives the longer they remain in the pool as it continues to mature outside of the initial 90 day bounty period.
Many people are looking at Uniswap and AMMs/Liquidity Pools as short-term "farming" ecosystems that will disappear soon. We look at it as the future of trading crypto, here today in a nascent form. The DeFi ecosystem is rapidly expanding and WLEO positions us right in the middle of the entire space. This is exactly where LeoFinance needs to be in order to onboard new users both to LeoFinance and to Hive itself.
In our 2020 roadmap (released a few months back), we teased a top secret project that would drop by the end of the year.
The original idea of this project is unrecognizable compared to where the actual development has landed us. What started out as a basic idea to make Hive better has turned into a backend architecture that will enable us to link our community (and the Hive blockchain) to other blockchains. I spoke with a few users privately about recent developments on LeoFinance and often referred to this idea that "DeFi has given LeoFinance a new sense of direction."
What I mean by this new sense of direction is simply that we better understand where LeoFinance needs to be positioned to offer the best apps we can build and most importantly; onboard new users to our ecosystem and the technology that makes it possible: the Hive blockchain.
This project has been dubbed "LeoInfra" which will build the backend infrastructure to allow cross-chain LeoApps including an upgrade to the current suite - LeoFinance, LeoDex, Hivestats - and will also lay the foundation for the next generation of apps we build. Why stop at WLEO when we can build apps that bridge Hive to Ethereum and other blockchains?
We're incredibly close to delivering the first iteration of this project and more details will be released within the next few days along with the first live integration of cross-chain features which will be launched on the https://leofinance.io website. This is one of the most ambitious projects we've worked on yet and I can't wait to see the community's feedback on it.
LeoFinance is a blockchain-based social media community for Crypto & Finance content creators. Our tokenized blogging platform (https://leofinance.io) allows users and creators to engage and share content on the blockchain while earning LEO token rewards.
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