GUILD Liquidity Provider Rewards
Did you know that providing liquidity to specific GUILD pools on Alcor can earn you extra GUILD? This article breaks it down!
Disclaimer: The contents of this article an explanation of the GUILD Liquidity Provider rewards. This article is not financial advice. As with any DeFi activity, providing liquidity to pools can create risk. Do your own research.
What is providing liquidity?
GUILD is swappable for other WAX tokens, such as FATE, NEFTY, and WAX itself. However, for GUILD to be easily convertible, there needs to be some resource pool that contains both GUILD and the other token. When someone wants to get some GUILD, they can send WAX to this pool to receive some of its GUILD, and vice versa. But where does the pool come from?
That’s where liquidity providers come in. Providers stake equal values of GUILD and the second token to the pool to create a resource people can use for swapping. In return, they get a cut of the fee for swapping based on the share of the pool they contributed.
Providers can withdraw their liquidity at any time, but will generally receive a different amount of tokens than they deposited, because it is based on equal values, rather than equal numbers. Depending on how each token is performing, this could potentially result in a net loss, so it’s important to do your own research.
How does it work?
The GUILD Liquidity Provider rewards incentivises people to provide liquidity to GUILD, giving participants the opportunity to get a cut of all GUILD sales on NeftyBlocks that each epoch.
Depending on the proportion of liquidity provided and how long the liquidity is provided for, you may be eligible to receive free GUILD each period.
Liquidity providers will be checked regularly throughout the epoch, with each day being divided into 48 snapshot windows. The top 1000 providers to each pool at each window will be eligible for rewards.
The first epoch will run for the first half month of February, starting on February 6th through to February 19th, with rewards being paid out on the 21st. Future epochs will run for 14 days each, beginning Sunday and ending Saturday of the week after.
Where does the GUILD come from?
Currently 2% of every sale made with GUILD on the TAG NeftyBlocks page is allocated to tokenomics. Half of that GUILD is designated to be burned, and the remaining GUILD is allocated to the reward pool.
At this point in time, the only active tokenomics mechanism is the LP rewards, meaning the entirety of the reward pool will be distributed to liquidity providers.
Three Tokens, Three Pools
On Alcor, there are three pools that are currently eligible for Liquidity Provider rewards. These are:
- WAX/GUILD — 50% share of the reward pool
- NEFTY/GUILD — 25% share of the reward pool
- FATE/GUILD — 25% share of the reward pool
To receive rewards from Epoch 1, you need to have liquidity in one of these three pools. If you do, you’ll automatically receive your payout reward at the end of the epoch.
Wrapping up
As a general note, the TAG team is working on updating the tokenomic model for GUILD, and will be revealing more details in early March. This revised model will include a higher burn rate and increased reward allocations for all categories.
Keep an eye out for more details for when the whitepaper is updated, which will be shared here, on our Discord, and across our social media.
The Adventurer’s Guild is still in closed beta, so the rewards are limited by the restricted access to the game but as the project grows, we hope to see GUILD rewards increase significantly!
