How will cSwap resolve the problem of mercenary capital?

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11 Nov 2022
36

cSwap will resolve the problem of mercenary capital with its unique incentive design.

Problem: Protocols face the problem of attracting liquidity. To incentivize early liquidity, a protocol needs to distribute a huge number of tokens for users to be early liquidity providers.
When a protocol is new, a lot of tokens are distributed; that is how the current system works to attract liquidity. Many yield farming schemes couldn’t sustain themselves due to unsustainable token emissions.

cSwap Solution: cSwap's incentives are designed differently than the traditional liquidity mining incentives adopted by most AMM-based DEXes. A unique concept of meta pools with a master and a child pool has been introduced by cSwap.
The master pool is the entry to earn incentives to be paid out in that particular token on other child pools. The master pool would be used on cSwap and other apps as a prerequisite for earning token incentives. The incentives are proportional to the liquidity in the master pool.

For Instance:
If we would have $XYZ/$ABC as a master pool, all the $ABC incentives that would be given out in $ABC, would require LPers to LP in the master pool, so it creates a net neutral effect where $ABC incentives go to the LPers who are long-term project supporters.
cSwap's liquidity farming rewards offer long-term efficiency and sustainability. It ensures users who contribute maximum value to the protocol earn the rewards and disincentivizes mercenary capital.

More Details: https://lnkd.in/dsUtpbG6

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