CAVIAR Airdrop
Welcome to the CaviarNine Liquidity Incentive Program, an initiative aimed at boosting the liquidity of our platform and enhancing the Total Value Locked (TVL) on Radix. By encouraging community members to become liquidity providers (LPs) in our select pools, we're not only benefiting LPs but also elevating the trading experience for the entire Radix community.
Overview of the Liquidity Incentive Program
The Liquidity Incentive Program invites community members to contribute tokens to specific Shape Liquidity incentive pools, becoming LPs and earning rewards in the form of CAVIAR tokens. These rewards are calculated based on the amount, duration and activity of your liquidity contribution, with a particular emphasis on active liquidity—tokens that are near the current market price, thus maximising swapping potential.
Replacing the earlier CAVIAR Airdrop
This program supersedes the previously announced CAVIAR airdrop, aligning more closely with the timing of RDX Works liquidity incentives. It represents a more integrated and strategic approach to rewarding our community for their contributions.
How It Works: Simple, Engaging, Rewarding
Entering the program is straightforward and potentially lucrative. By contributing tokens to any of our specific incentive pools, you become eligible for CAVIAR rewards. These rewards are designed to recognise and incentivise the provision of active liquidity, enhancing the overall trading efficiency on our platform.
Multiple Rewards
Participants can expect to receive multiple forms of rewards:
Airdrop Rewards: An allocation of 100,000 CAVIAR will be distributed weekly to each of the selected incentive pools, with airdrops scheduled for the coming months.
Fee Income: LPs will continue to earn their share of trading fees generated within the liquidity pools, in addition to the airdrop rewards.
Selected Pools
These are the pools that pay CAVIAR airdrop rewards.
The CAVIAR/XRD pool, weekly allocation of 100,000 CAVIAR rewards.
What is Active Liquidity?
In the context of our CaviarNine Liquidity Incentive Program, 'Active Liquidity' refers to the tokens within a liquidity pool that are available for trading at or near the current market price. Our program rewards liquidity providers based on their contribution to these critical price ranges, which are determined by a concept known as 'bins'.
Weekly rewards for liquidity providers are determined by comparing their active liquidity to the total active liquidity in the pool. The more a provider's liquidity falls within the active bins, the greater their share of the rewards.
Active liquidity for the CAVIAR/XRD pool is defined by 3 bins - the bin spanning the current spot price and the bins immediately below and above it.
Active liquidity for the other pools is defined solely by the bin spanning the current spot price (since the bins in these pools are wider).
Example: Active Liquidity Calculation
For illustration purposes, let's consider the CAVIAR/XRD pool. In this pool, each bin is set to be 1% wide. When a liquidity provider uses the Advanced Add Liquidity widget and sets the Mid Price to the current spot price, setting the range to 3 bins wide will display the range of the current active liquidity.
The 'Min - Max' values represent the price range of the current active liquidity. For instance, if the Mid Price is set at 0.29648, with a bin width of 10, the active liquidity range would be 0.29238 to 0.30129.
Note: we are not suggesting you need to concentrate your liquidity in only 3 bins. We are merely highlighting the concept of active liquidity. Please choose the liquidity profile that best suits your view and risk tolerance. The active liquidity bins will change over time as spot moves around as a consequence of trading.
Program Timeline
Launch Date: The program kicked off on Friday, 26th January 2024, with the CAVIAR/XRD pool.
Duration: The program is slated to run for a minimum of 6 months, with the possibility of extension or modification based on its performance.
Reward Mechanics: Fair and Transparent
We employ a snapshot-based approach for calculating rewards, ensuring fairness and accuracy in the distribution of airdrops. Rewards are distributed on a monthly, rolling basis, proportional to each user's active liquidity in a given pool for the preceding weeks.
To preserve the integrity of our Liquidity Incentive Program and ensure a fair distribution of rewards, we reserve the right to reduce or deny the airdrop to participants deemed to be gaming the system for an unfair advantage over other LPs. This includes, but is not limited to, the provision of sporadic or transient liquidity with the sole aim of airdrop farming, which does not genuinely contribute to market health or benefit traders.
Terms and Insights
No Limits: There are no minimum or maximum contribution limits. Higher liquidity contributions, especially near current market prices, increase your chances of earning a larger share of the rewards.
Multiple Pools: Participants are free to contribute liquidity to various pools simultaneously, with rewards calculated separately for each pool.
Active Liquidity: Our program places a premium on liquidity that is near market prices, as it contributes more significantly to trades and overall market health.
Disclaimer
Please note that the rewards, timelines and airdrop schedule outlined in this program are subject to change or termination based on participation levels and the overall performance of the program.
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