wLEO Uniswap Liquidity Pool Incentives and 300,000 LEO Bounty Reward
When wLEO launches, providing liquidity to the Uniswap liquidity pool is an essential way to grow the usage and volume of Wrapped LEO on Ethereum. By having deep liquidity reserves on Uniswap, we open up the door to new wLEO investors and create a self-reinforcing cycle of having new wLEO buyers who then turn around and provide additional liquidity to the pool.
We saw a somewhat muted launch for wHIVE. The primary reason is that there weren’t any liquidity pool (LP) incentives in place. Most successful Uniswap token listings include some sort of additional “bonus” in terms of LP incentives. LP incentives are vital to a successful launch on Uniswap because the initial volume is likely to be low until you get deep liquidity reserves.
As we mentioned in the announcement post of the wLEO token: this is a classic chicken and egg problem.
If you don’t have a deep liquidity pool on Uniswap, then you won’t get much trading volume. If you don’t get much trading volume, then the rewards for being a liquidity provider are extremely low. If the rewards for being an LP are extremely low, then there is no reason to be a liquidity provider to that pool as you can turn to others where the rewards are better.
An LP incentive bonus is the solution to this problem. By having an initial bonus period — think of it like an early bird special — you give people an incentive to become an early liquidity provider to a pool that doesn’t have a lot of liquidity/volume yet.
Show Notes: https://leofinance.io/hive-167922/@khaleelkazi/xmmbotgy
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