The Pearl Flywheel

Dynamic Incentives: The Missing Liquidity Ingredient

The Pearl thesis is a flywheel that runs in reverse with incentives driving the ecosystem forward.

We proved the success of a liquidity marketplace could be engineered through sustainable incentives paid into the system, sourced from a reliable, automated source that's correlated to protocol TVL.

These incentives support demand for the emission token which helps sustain ongoing TVL growth.

Introducing Dynamic Incentives

With the right type of token integrated into Pearl, we can now guarantee that incentives increase as TVL increases.

Through our partnership with Tangible, we believe we've cracked the code on the sustainable rewards for liquidity providers, using dynamic incentives sourced from off-chain yield to incentivize emissions token accumulation.

It is a requirement for all pairs with gauges on Pearl to pair with USTB or other rebasing stable asset. USTB is backed by US Treasury Bills (via USDM) and delivers a risk-free rate of 5% guaranteed by the US government. Using these rebasing assets, the native APY is skimmed by Pearl and used to dynamically incentivize the pool from which it is sourced, leading to a sustainable, self regenerating flywheel.

How it works:

  1. Liquidity pool voters receive dynamic incentives (yield skimming from Tangible products)

  2. Increasing value of sticky incentives drive demand for vePearl to receive dynamic incentives and pool fees

  3. This drives up demand for Pearl and its price

  4. Pearl emissions are now more valuable

  5. TVL increases as users provide liquidity to gain free access to Pearl

  6. Dynamic incentives expand as TVL expands

In the liquidity ecosystems, incentives matter. They are the key to driving action and disrupting established power. This is what makes Pearl different and why we believe Pearl can be a success where others have failed.

This is the power of the Pearl flywheel.

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