Protocol Incentives
Last updated
Last updated
Liquidity marketplaces incentivize liquidity providers (LPs) with rewards in emissions tokens, inflating assets that face nearly limitless sell pressure. Protocol success is determined by the team's ability to maintain lasting value for their rewards token.
Our innovative approach uses off-chain yield to build a self-sustaining system that promotes long-term growth and stability though known, projectable rewards for our protocol participants.
Incentive alignment is a fundamental driver to activity in crypto. Nothing moves forward unless everyone has something to gain from it. Traditional DEXs, like Uniswap, face issues providing sufficient incentives for LPs and governance token holders.
Pearl's model solves these issues through a unique incentive structure, balancing rewards distributed in an inflating governance token with appropriate incentives to lock these tokens, reducing sell pressure to maintain token value and protocol-wide APRs:
Incentivizing LPs with fees and governance token emissions for liquidity in the active range
Directing trade fees to liquidity providers to ensure markets function even under extreme market moves
Allow for protocol emissions to be distributed unequally to pools and let protocols incentivize locked token holders to vote for emissions to flow to the pools with their tokens
This structure ensures high utility and rewards for holding and locking the governance tokens, which in turn helps maintain the tokens price, pool APRs and results in sustained liquidity.
The Pearl model aligns the incentives of all participants. This includes $vePEARL voters, liquidity providers, traders, and protocols.
$vePEARL Holders: Earn incentives from protocols looking to bootstrap their liquidity.
Liquidity Providers (LPs): Incentivized with $PEARL emissions in high emissions/low volume pools, which they can lock for additional incentives (see above). Or LPs can choose to earn fees in high volume/low emissions pools. Both options encourage balanced liquidity provision.
Traders: Benefit from extremely low slippage thanks to concentrated liquidity, incentivized with active rage emissions for LPs. Better prices for traders mean more volume and fees for LPs.
Protocols: Get access to a cooperation-oriented liquidity hub with capital efficient trading conditions. Plus the ability to create high-yield pools for their token through incentives offered to $vePEARL voters. They can control their future liquidity within this system.
