FAT Liquidity Staking
TL;DR
We will incentivize 80/20 FAT pools with farming rewards to promote deep liquidity for the FAT token.
Liquidity Providers (LPs) are exposed to minimal Impermanent Loss in an 80/20 weighted pool.
In the near future, 30% of all protocol fees will be distributed to Liquidity Stakers in the 80/20 FAT/FTM pool.
80/20 Incentivized Pools
The primary source of initial liquidity for the FAT token will be the 80/20 FAT pools hosted on Fatima Farms. To incentivize deep liquidity for these pools, we will be allocating them the largest multiplier across all available farms.
Benefits of the 80/20 Weighted Pools
As illustrated in the chart below, the 80/20 weighted pool suffers significantly less impermanent loss than the standard 50/50 pool utilized by most AMMs. We see it as the optimal solution to ensure deep liquidity while allowing FAT holders to maintain long exposure.
Protocol Fee Distribution
In the near future, 30% of protocol fees will be redistributed to the FAT lp. Liquidity providers’ of The FAT token (80/20 FAT/FTM) will be able to stake their LP tokens in the Dairy/Cattle/Goat farms and receive “fFAT” (or “Fresh Fat”) these represent your LP position, which will grow over time the longer you stay in the one of the pools. A new farm will be created for fFAt and emissions of the existing farms will be redirected to this new farm. Once a week, the protocol fees are collected and 30% will be put into the FAT/FTM pool. The received LP tokens will then be transferred into one of the 3 pools, increasing the value of the fFAT token. This process is a manual effort for the time being but will be automated with a contract as soon as possible.
The characteristics and benefits of the 80/20 weighted pool will allow us to forgo any single staking pools for the FAT token.
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