Here, we will introduce you to the concept of liquidity mining, its purpose, and how you can earn additional rewards in $UDO by providing liquidity to our liquidity mining program.
About the Program
What is Liquidity Mining?
Liquidity Mining is a network participation strategy in which a participant provides additional capital to the market in return for liquidity provisioning fees. By boosting liquidity, liquidity mining ensures that digital assets can be traded at a stable price with less slippage. This addresses the lack of liquidity challenge — a key problem in crypto markets that has historically been a prime contributor to price volatility, leading to inefficiency in both accumulating and trading of tokens.
Moreover, liquidity mining is an effective way to support the wider distribution of the UDO token to the community, allowing the general public to participate in the market making and being rewarded for liquidity provisioning.
Unido Liquidity Mining Program Explained
The Unido Liquidity Mining program provides a custom interface where UDO token holders can provide liquidity through UniSwap, either into the UDO/ETH or UDO/USDC pools, in return for an LP token that, when staked, will provide additional UDO token rewards, claimable via the portal’s user interface.
The purpose of the Unido Liquidity Mining program is to create a healthy environment where the UDO token can be accumulated and traded efficiently. The program is designed to provide:
An attractive APY for early Unido adopters who choose to become liquidity providers by staking their UDO tokens in either the UDO/ETH or UDO/USDC pools.
A fair and intelligent mechanism through which we promote the decentralization of the Unido ecosystem by incentivizing more community members to become UDO token holders and earn a passive income through liquidity provisioning.
Increased liquidity for the UDO token that will reduce the volatility, particularly when Unido clients accumulate tokens in bulk to pay for Platform Access and Consumption Fees needed to access the enterprise platform.
UDO token holders can safely and seamlessly connect their MetaMask wallet to ULM via the simple-to-use user interface and deploy their capital and earn rewards via the Uniswap liquidity pools.
Pairings: There are two liquidity mining pools on Uniswap: UDO/ETH and UDO/ USDC pairings.
Rewards: A total of 100,000 UDO per week will be released to both pools each month to reward participating liquidity providers.
Release Schedule: The release schedule for the following month will be released in the final week of every month for the duration of the Unido Liquidity Mining Program.
Program Length: The liquidity mining program will run for 4–6 months, depending on the growth of the Unido ecosystem and macro cryptocurrency market sentiment.
Rewards will gradually decrease every month.
Incentives and Rewards
The Unido Foundation will incentivize liquidity miners with UDO token rewards claimable via the ULM User Interface. We have aimed to provide competitive Annual Percentage Yield (APY) for liquidity providers based on extensive market research and created a dynamic token economic model that was designed to adjust reward rates based on underlying market conditions.
The reward, that the individual LP is entitled to, will be determined by two variables:
Share of the total liquidity pool the miner provides (separate for UDO/USDC and UDO/ETH pools). The greater the liquidity provided, the greater the proportion of total rewards the LP is apportioned.
The duration for which the LP participates.
This means that the longer the liquidity provider mines for, and the greater their share of the liquidity pool is, the greater share of the reward pool they will be entitled to. This model incentivizes early adopters as they will be able to mine liquidity for longer and with lower competition.
The liquidity mining program will run for 4–6 months, depending on the development of the Unido ecosystem and the prevailing macro cryptomarket conditions. Basic Liquidity Mining period is one month (defined as a 30 day period, not a calendar month). The rewards for the following month will be announced in the last week of the previous month (i.e. rewards for May will be announced in the last week of April).
Rewards for the first Liquidity Mining period are set by the Unido Foundation and are listed below, all subsequent reward allocations will be calculated dynamically based on our market model.
First Liquidity Mining Period Rewards:
For the first 30 day mining period, Unido foundation will provide 240,000 UDO in rewards to the UDO/ETH pool and 160,000 UDO for the UDO/USDC pools.
Estimated APY for the first Liquidity Mining period:
Disclaimer: Please keep in mind any APY is subject to change based on the number of people providing liquidity and staking LP tokens, as well as the volatility of the UDO token. All numbers specified below are just estimates based on the size of liquidity pools at the time of writing and will likely change. Provided estimates are without any guarantee and are non-binding, they are listed solely for information purposes
Based on the size of current liquidity pools and UDO token price, we project the APY for the first month of liquidity mining to be as follows:
Uniswap UDO-USDC 160% APY
Uniswap UDO-ETH 200% APY
How safe is the ULM Program?
The ULM has been extensively tested and fully audited by the leading blockchain security audit provider, Omniscia, to ensure the highest standards of security were met. The safety of our community is paramount to Unido which prides itself on enterprise-grade security and compliance standards. That is we are making the full security audit from Omiscia publicly available for full transparency with our community — you can check it out here.
To help you get prepared, there are two steps to take: