Why Liquidity Matters
Having more liquidity for a token allows people to trade more of it without incurring high price impact and provides utility for token holders who can earn from providing liquidity.How Liquidity Providers Work
Liquidity providers add liquidity by depositing equal values of two tokens (one usually a stable or native coin like WgUSDT) into a liquidity pool. Providing liquidity carries impermanent loss risk, where big price changes make depositors recoup less value than if they’d just held the tokens. LPs need to be highly compensated to take on this risk.STA Emissions to LPs
StableSwap rewards liquidity providers through STA emissions distributed proportionally. If you provide more liquidity in an LP, you get more STA as rewards.Weekly Distribution
StableSwap distributes a programmed amount of STA to liquidity providers across all pools. How much STA goes to each pool changes by weekly vote.- Acquire veSTA - Voters are veSTA holders who have locked STA to receive a veSTA NFT
- Vote for Pools - veSTA holders vote to distribute emissions to their preferred pools
- Emissions Distributed - Pools receive STA emissions proportional to votes received
Why Vote for a Pool?
Voters have several reasons to vote for specific pools: Build Liquidity - Get more liquidity for specific tokens Self-Interest - Be a liquidity provider on those pools and gain more for providing liquidity Direct Rewards - Get more direct rewards for their vote (most common reason)Voter Rewards
StableSwap rewards votes in two ways: fees and incentives.Fees
StableSwap charges trading fees when someone swaps tokens from a liquidity pool. Some of the tokens they trade are distributed to voters for that pool. More trade volume = more fees distributed to voters, so voters are incentivized to vote for pools they think will be highly used.Incentives (Bribes)
Anybody can incentivize votes for a specific pool by depositing tokens to be distributed to voters on that pool. Their thinking: if I pay voters for voting on that pool, I’ll get more votes and thus more STA emitted to that pool, which means more liquidity for tokens on that pool. Voters can add incentives for pools they’re voting on. They recoup some of their incentives by voting on that pool, and incentivize others to join them. Liquidity providers also can add incentives for pools they’re providing liquidity to, as historically pools get a multiple of the incentive value back in STA emissions.Emission Economics
Weekly Emissions Schedule
| Period | Emissions | Description |
|---|---|---|
| Average | ~4,160,000 STA/week | Over 3 years |
| Initial | ~6M STA/week | Bootstrap liquidity |
| Target | 650M STA | Over 156 weeks (3 years) |
| Long-term | 0.1%-1% of supply | Sustainable tail emission |
Distribution Split
| Allocation | Percentage | Description |
|---|---|---|
| Liquidity Pool Rewards | 80% | Distributed to LPs based on gauge votes |
| veSTA Rebase Rewards | 15% | Distributed to veSTA holders to reduce dilution |
| Team Allocation | 5% | Team and development funding |