KDX Liquidity Mining

The KDX Token is used to incentivize all the liquidity stakeholders on the eckoDEX network, while also being a deflationary token that rewards its holders for supporting the network.

When a liquidity partner provides liquidity to a pair, they earn the 0.25% trading fees that the AMM contract accrues, similar to other DEX’s. However, because eckoDEX runs completely on-chain, we can easily keep track of a provider’s original position and all trading fees gained throughout the process.

Therefore, when a liquidity provider decides to pull their liquidity out, they are presented with the option to receive their fees in the native tokens they provided or to earn them in KDX at a substantial incentive. If they decide to receive their gains in KDX tokens, then the network fees they would have received are swapped for KDX from the open market and combined with their boosted rewards. Different pairs will get different bonuses as different partnerships evolve or as eckoDAO sees fit.

The below examples, are EXAMPLES. Boosters are relative to their associated pool.

Example:

  1. A provider gives $250 in both Asset 1 and Asset 2 to an LP Pair ($500 total),

  2. Over 3 months the LP Pair earns $200 in fees,

  3. Assuming there is no change in the token prices:

Option A: When the provider chooses to exit the position they have the option to receive $350 in Asset 1 and $350 in Asset 2 ($700 total ($500 in underlying assets + $200 in fees).

Option B: Or $250 in Assets 1 and 2 ($1100 total ($500 in underlying assets + $600 in fees paid in KDX) hence offering them three times as much fees ($400 extra in this example) if cashing out their fees in KDX!

4. Finally, if the provider chooses to take the KDX rewards instead, then the $200 in fees are used to buy KDX tokens from the open market.

This, coupled with the fixed maximum supply, allows KDX to be one of the first deflationary DEX tokens ever, while also providing unique LP incentives that will drive opportunistic DeFi customers to our new and growing network. Over time, we plan to provide additional DeFi services and systems including service fees from stablecoins, farming, and lending tools built on top of the eckoDEX Safe DeFi platform.

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