Enhancing Liquidity: Introducing the LAKE Token Liquidity Provider Rewards Program
Dear Community and Investors,
We have listened to your feedback, and we believe the time has come to increase both the use-cases of the LAKE token, as well as the liquidity. Liquidity provider incentives have always been on the roadmap, from its inclusion in the white paper to the current 12% allocation of total supply reserved for it, and we are proud to unveil today our first Liquidity Incentives program!
Starting from today 30 August at midnight CET, 60 million LAKE tokens will be dedicated over the next 12 months to reward LAKE-ETH Uniswap V3 liquidity providers on our dapp: https://app.data-lake.co!
Please note that while you can already create LAKE-ETH LP and stake them in the LP incentives smart contract from our dapp at https://app.data-lake.co, the emission of the $LAKE rewards will begin today 30 August at 23:59:59 CET.
If you are unsure on how to create and stake LAKE-ETH LPs, we’ll be releasing a video tutorial tomorrow that will walk you through the steps!
Keep reading the article to learn more details on why our liquidity providers will contribute both to the stability of LAKE while being rewarded for doing so.
Why would one want to provide liquidity?
Providing liquidity is NOT for everybody, as it comes with risks such as impermanent loss (best explained by this article) — risks as well as eligibility criteria are detailed in T&C, that need to be approved before participating our Program. In particular please note that this Program is not for consumers, but for professionals conducting business activities in crypto. Providing liquidity comes with two main benefits:
- For each exchange of tokens, Uniswap charges traders a small fee. A part of this fee is automatically distributed in a proportional way to all those who contributed to the liquidity pool involved in the exchange.
- Moreover, projects may be interested in providing further incentives to those who provide liquidity, for example distributing their own token to the LP.
And it is in this exactly in this context outlined in point 2 above that we are hereby announcing that — starting August 30th, 2023–60 million $LAKE tokens will be distributed to all liquidity providers for the next 12 months!
If you own 1,000,000 LAKE (let’s say it is worth around $2,000) and 1 ETH (let’s assume a value of $2,000, too), then you can use these two tokens to provide liquidity on Uniswap V3, stake the NFT representing your position on our dapp
and receive a reward from the trading fees as well as from $LAKE incentives. If the liquidity pool is composed by $40,000 worth of assets, then you represent 10% of the liquidity pool and you’ll be eligible to receive 60,000,000 / 365 / 10 = 16,438 $LAKE tokens every day + trading fees rewards that depend on the volume exchanged on the $LAKE-ETH pair. In this example, your Annual Percentage Rate (APR) coming from the LAKE incentives would be of around 300%.
Note however that such APR can vary at any time, as it is influenced by several factors such as: the volumes registered by traders on the $LAKE-ETH pair, the amount of liquidity supplied, the value of $LAKE, the value of ETH and eventual changes in Uniswap V3’s fees structure.
In the DeFi world where liquidity is a fundamental factor to evaluate the value of a token, providing liquidity also means proactively supporting a project, as it contributes to the token’s appeal to big buyers and potential partners.
If you have questions, feel free to ask them on our Telegram group. Stay tuned for further updates and announcements as we continue to evolve and innovate. Thank you for your ongoing support!