One of the most important characteristics of an exchange is trading volume. Trading volume provides asset liquidity, lower spreads and in general more attractive and dynamic trading experience for traders. Shortage of liquidity is a well known problem, that affects most of AMM exchanges to some degree. With that in mind, to provide Tsunami users with the best possible trading experience, we are happy to announce a liquidity mining program!
Tokenomics update and Token Burn
Recently, we’ve extracted over 250,000 $TSN from the ILO pool. We’ve decided to allocate 150,000 $TSN to our liquidity mining incentive and burn 100,000 $TSN, reducing total supply of $TSN to 900,000.
Liquidity mining incentive is here for at least two years. Maximum amount of $TSN distributed to liquidity miners is 6250 per month.
Token burn is scheduled to 11.08.2022.
Liquidity Mining
Liquidity mining is our way of incentivizing trading on Tsunami, increasing trading fees and Tsunami staking APR. It’s a reward in the form of $TSN tokens, that will be distributed to all traders who paid fees in a given period. The length of the period is 1 week, and rewards are claimable right when the period ends.
The amount of rewards the trader will receive upon completion of the period will be determined using the following formula:
Where:
-
TotalFees - Total fees collected in the market by all traders in a given period
-
RewardAssetPrice - price of reward asset in USDN
-
RewardRate - percentage of fees (fees APR) we are giving away as traders reward (0.7 means 70% of fees are converted to rewards, 2 means traders get 200% refund of his fees)
-
TraderScore for each trader is computed using the following formula:
Where:
-
a - weight of fees relative to open notional (initially set to 2)
-
averageOpenNotional - average amount of open interest (borrowed funds) by trader in a given period in a given market
If all of the above math is a little unclear for you, don’t worry, here is a simpler explainer. You will receive a certain percentage of your trading fees back in the form of $TSN tokens. This percentage may vary from pair to pair, and the exact amount will be displayed in the trading application. You will receive more cash back, opening a larger position and holding them for longer. However, average position size is less important than the amount of fees paid, so trade safe!
One additional point is that liquidity mining is available not only in $TSN, but other tokens as well. We are currently negotiating several more listings on Tsunami, mostly Waves ecosystem tokens. Some of them very well may be available for mining not only $TSN but a trading token as well, resulting in more than 500% APR return on a trading fee. Sounds interesting, huh? Stay tuned for further updates!