FNX ERC20 Liquidity Mining Starts at 14:00 UTC on Aug 21st!
We are thrilled to announce FinNexus’s first FNX liquidity mining campaign!
A healthy FNX ecosystem requires deep liquidity pools so that community members may enter larger FNX positions with as small a price slippage as possible. Though we plan to eventually list our ERC20 token on centralized exchanges, Uniswap will remain a major gateway into the FNX ecosystem on Ethereum. We are excited to continue supporting Uniswap while increasing the depth of our recently launched FNX/ETH pool on Uniswap.
This particular FNX liquidity rewards program will start at 14:00 UTC on Aug 21st and will last for a period of 4 weeks.
FNX ERC20 tokens will be distributed as rewards to liquidity providers for the FNX/ETH pool on Uniswap V2 in this 4-week period. This mining campaign is not a one-time promotion, and further FNX rewards program will be announced at a later date.
As the team indicated here and here in previous discussions about bootstrapping network effects to ensure FNX token value capture, the token bucket in our whitepaper and tokenomics reserved for Variable Issuance will be used. This category of tokens, 75 million in total, is intended to be distributed to active and engaged FinNexus ecosystem participants over the next 5 to 7 years. We store these FNX tokens at this Wanchain address.
To facilitate this incentive program, according to estimation, we will, in advance, move 1 million FNX WRC20 tokens to our Ethereum lockup address on Wanchain, mint the same amount on Ethereum, and put it in the smart contract. Upon the end of the 4-week period, if there are FNX left in the contract, the remaining will be locked up again. If FNX is exhausted, we will repeat the above lock-and-mint process.
Although this movement of tokens represents a certain increase in our FNX circulating supply, we believe the entire community will benefit from the additional FNX token depth on Ethereum. In turn, the pooled model of the FNX Options platform that will soon debut on Ethereum will benefit greatly from the increase in available FNX collateral.
To fully incentivize the participants in the pool, the initial expected APY in FNX for this promotion will be around 600%! This number is based only on the FNX contributed to the FNX/ETH Uniswap pool and calculated on the USD value of FNX on August 13, 2020.
If this initial trial liquidity mining program goes smoothly, the FinNexus team hopes to institute more rewards for liquidity provision across other Uniswap pairs and perhaps even other protocols such as Balancer and Bancor. We are particularly keen to test our thesis that such a reward program leads to deeper liquidity pools as well as the durability and persistence of that depth.
To stake and begin earning FNX liquidity mining rewards:
- You must first provide liquidity to the FNX/ETH pool on Uniswap V2. You will need to deposit an equal value (not the equal amount) of FNX ERC20 tokens and ETH coins into the pool.
- After successfully contributing your crypto (you will need to approve FNX and/or ETH to interact with the Uniswap smart contract first), liquidity providers will receive UNI-V2 pool tokens. These UNI-V2 tokens represent your share of the FNX/ETH liquidity pool. You can track the size of the pool and your share of it here. The share of liquidity provided by FinNexus Foundation located here will of course be excluded from earning rewards. Please note that merely providing liquidity will NOT earn you FNX rewards, you MUST complete the next step.
- Visit the mining UI (which will be on liquidity.finnexus.io). With the UNI-V2 tokens from the previous step in your address, enter the amount of FNX/ETH UNI-V2 tokens you want to stake from your wallet. Once you have completed this step, you will begin to accrue FNX rewards.
The specific distribution rules will be as follows:
- FNX will be distributed based on the staked amount of UNI-V2 tokens from each address in the rewards contract.
- The number of FNX rewards accrued is according to the balance of the staked UNI-V2 tokens in each address and the time staked. Thus, liquidity providers will be rewarded for both the time in the pool and the amount of FNX and ETH in the pool. Earlier stakers and stakers with higher value of stake will earn more FNX during this incentive program.
- The mining reward is 0.5 FNX per day when staking one UNI-V2 token.
- FNX rewards accrue in real-time. Token holders who have staked their FNX/ETH UNI-V2 tokens will need to “claim” their FNX token rewards on-chain. Unlike other yield farming programs, these rewards will not be automatically distributed. Please be aware of the ETH gas fees required to claim your FNX rewards.
- Liquidity providers also earn a pro-rata portion of the trading fees that accrue to the pool. With each transaction, the Uniswap Protocol assesses a 0.3% fee that accrues to the pool itself with each trade. When liquidity providers “withdraw” their UNI-V2 tokens from the mining UI (will be on liquidity.finnexus.io), they will also be able to access their portion of accumulated transaction fees in the FNX/ETH liquidity pool.
- The time for depositing UNI-V2 tokens and the start of the FNX rewards accrual will be announced shortly.
Participate in our liquidity mining rewards program and join the FNX Army!
FinNexus is building a suite of open finance protocol clusters that will power hybrid marketplaces trading both decentralized and traditional financial products. The headline product to be released is a fully decentralized bitcoin (and other cryptocurrencies) options model that will live on both Wanchain and Ethereum.