Extension of Liquidity Rewards on Demex

Lynn Choy -

*Liquidity rewards have since been extended to March 2022.

Great news for all liquidity providers! We’re extending our liquidity rewards on Demex for an additional 6 months! On 11 March 2021, the on-chain proposal submitted by Switcheo core devs (with suggestions and feedback from the community) to keep rewards going on Demex was passed.

The liquidity mining programme was first launched on Demex as part of our Switcheo TradeHub v1.9.0 upgrade that activated liquidity pools and AMMs on the protocol. The intent was to incentivise liquidity contribution with robust yields in the initial bootstrapping period for Demex’s novel AMM-simulated order book exchange model.

The liquidity reward extension was proposed for several reasons, which we elaborate on below.

Why We Are Extending Liquidity Rewards

Liquidity rewards are being extended chiefly to incentivize liquidity for new markets that are being added on Demex. This would ensure that the order books for newly-added markets are sufficiently liquid to support trading on the platform.

In line with the decommissioning of Switcheo Exchange, popular markets with high trading volumes are being migrated over to Demex so users can continue trading their favourite tokens at a low cost. Ensuring these markets are sufficiently liquid for trading is essential in creating a seamless user transition from Switcheo Exchange to Demex. The markets being added along with their corresponding reward weights are as follows:

  • nNEO-50-ETH-50 (1x)
  • nNEO-50-nGAS-50 (1x)
  • nNEX-50-nNEO-50 (NEP-5 variant of NEX, pending custom lockproxy contract (1x))

As part of Switcheo’s partnership with Poly Network, a Binance Smart Chain integration has been in the works for the past couple of weeks to facilitate cross-chain trading between BSC and Switcheo TradeHub.

Upon completion of the integration, BEP-20 token pairs along with their corresponding liquidity pools can then be added onto Demex. By incentivising these new LPs with rewards, we hope to be able to better attract and onboard new users onto Switcheo TradeHub.

Coming soon with Switcheo TradeHub v1.15.0 software upgrade:

  • nNEO-50-BUSD-50 (1x)
  • CEL-50-BUSD-50 (1x)
  • SWTH-50-BUSD-50 (2x)
  • WBTC-50-BTCB-50 (1x)
  • BUSD-50-USDC-50 (1x)

The liquidity reward extension will also include a component to rebalance and adjust the weights of existing liquidity pools on Demex.

  • SWTH-20-ETH-80 (4x)
  • SWTH-20-USDC-80 (4x)
  • ETH-50-WBTC-50 (1x)
  • ETH-50-USDC-50 (2x)
  • WBTC-50-USDC-50 (2x)
  • CEL-50-USDC-50 (0x)
  • NEX-50-USDC-50 (0x)
  • nNEO-50-USDC-50 (0x)

Details on the Liquidity Reward Extension

  • 30% of block rewards issued as rewards over a period of 6 months (27 weeks)
  • Rewards decrease linearly each week to 20% on the final week
  • Coming soon with Switcheo TradeHub v1.15.0 software upgrade: New boost reward system where LP tokens are committed for a maximum duration of 1 month for a reward boost of 2x.

Liquidity rewards will be extended for another 6 months (27 weeks) where 30% of block rewards will be distributed to LPs. This percentage will decrease every week to 20% until the final week (week 26).

Upon Switcheo TradeHub’s v1.15.0 upgrade, the boost curve that distributes additional rewards for committing LP tokens will be amended to a maximum of a 1 month lockup period with a 2x reward boost. Until then, boosted rewards remain unchanged.

What This Means for Existing Liquidity Providers

The proposal to extend liquidity rewards will be executed today, 11 March 2021, 3pm SGT. Nothing needs to be done by liquidity providers as rewards will be adjusted automatically.

For liquidity providers who have committed their LP tokens past the end-date of the original liquidity mining programme (11 March 2021):

  • LP tokens will remain locked as per the initial commitment period
  • Upon Switcheo TradeHub’s v1.15.0 upgrade (coming soon) the new boost reward system will be activated. LPs with tokens locked up then will be eligible to earn the new boosted rewards until the end of the lockup period
  • Maximum of 1 month commitment duration for a 2x boost

For example, let’s assume Alice has committed her LP tokens until 11 May 2021. Her LP tokens will continue to remain locked until 11 May, but she will be able to earn the new boosted rewards upon the Switcheo TradeHub v1.15.0 software upgrade.

How to Contribute Liquidity on Demex

With liquidity rewards on Demex set to continue for another 6 months, there's no better time than now to start being a liquidity provider! Head to https://app.dem.exchange/pools today to start earning.

For more details on how to provide liquidity, check out our detailed guides.