When redeeming from MINt to MIN, instead of giving users yield farm boost on the
MIN/ADA pool exclusively, we give users yield farm boost on any pair, possibly even in
different weights. The aim is to give the MINt token more usability, powering the DEX as
The MINt tokens are the tokens that will be airdropped to the community through several mechanisms, and that aim to incentivize and reward Liquidity Provision to the Minswap DEX. As described in the FISO FAQ section, to convert from MINt to MIN tokens (the governance token of the DEX with commercial value), one has to provide an amount of MINt and ADA in a 50:50 weighting to a MIN/ADA pool. Then, a MINx/ADA LP token will be minted and locked for 45 days. The ‘x’ indicates a multiplier for yield farming rewards on top of the normal MIN/ADA LP rate. After 45 days lockup, the amount of ADA and MIN you can withdraw gradually increases on an additional 45 days linear vesting period, after which you can withdraw 100% of your ADA and MIN. The LPs that convert their MINt tokens will have one of the biggest boosts on yield farming rewards of MIN tokens ever.
Currently, there are 100,000,000 MINt distributed through the FISO airdrop and 5,000,000 MINt distributed through incentivized testnet airdrop, representing 2.1% of total MIN supply. MINt has a 1:1 conversion rate to MIN.
Having a gigantic liquidity pool for the MIN/ADA pair on launch wouldn’t be the best scenario for the Minswap protocol, as other pairs would lack the necessary liquidity and thus be inefficient. Additionally, forcing users to lock liquidity and thus exposing them to the IL in the MIN/ADA pair would also prevent adoption, and increase selling pressure of MINt on secondary markets. Enabling the conversion of the MINt token in additional pools would prevent this.
In the previous option, when redeeming MINt tokens, one deposits MINt and ADA tokens in a MIN/ADA pool, at which point they convert to MIN tokens, and after a lock-up period of 90 days they can be fully redeemed.
In this second option or “boosted yield farming”, a user would first provide liquidity in the DEX with their tokens (for instance in the LQ and ADA, LQ and MELD or any X/Y pool), hence obtaining a normal LP token. Then, by staking this LP token plus their MINt tokens to yield farm pools, liquidity providers can redeem MIN. Two things will happen:
The LP tokens corresponding to the MINt tokens that are aimed to be redeemed will be locked for 90 days and yield additional MIN rewards. The ratio between LP tokens and MINt tokens will be configured for each pool.
MINt tokens will be burned and the same amount of MIN tokens are minted with 90 days vesting period.
For illustration, the process would be: a user provides a liquidity pair to the DEX (for instance MIN and ERG, ADA and ERG or ERG and MELD), the user gets an LP token, the user locks these LP tokens along with the MINt tokens in a farm, and after 90 days the LP tokens, the earned MIN from providing it and the converted MIN can be redeemed.
This basically has the same effects as the previous mechanism: converted MIN tokens from MINt will be locked for 90 days, and users receive yield farm boost for 90 days on their locked LP tokens. However, by having the option to utilise their MINt tokens locking their liquidity on pools different from the ADA/MIN one, users will reduce their exposure to IL, which in this particular pool would be relatively significant.
Moreover, as the changes pertain to the Smart Contract of the MINt token, it would not delay the launch of the DEX, while giving users extra incentives to provide liquidity. In addition, boosted yield farming users generate more yield, not only from the MINt to MIN conversion, but also from the locked LP token generating MIN tokens. The downside is the MIN/ADA pool will have less liquidity to trade, but increased adoption will drive Minswap valuation and compensate for this.
- Yes, I support this measure
- No, I am against this measure