Incubating eggs with AMM pools
Micro governance over AMM pools enabled by PoolHive Objects
DegenHive's Automated Market Maker (AMM) sets a new standard in DeFi by being the first community-owned AMM driven by dragon-bee owners. This innovative system allows dragon-bee owners to actively participate in directing HIVE and HONEY token emissions to different AMM pools, effectively shaping the liquidity landscape of our platform.
Dynamic Token Emissions and Voting Mechanism
Emissions Voting: Dragon-bee owners can lock their dragon-bees with specific AMM pools, "voting" to allocate more HIVE and HONEY emissions to those pools for each voting cycle. This unique feature integrates community governance directly with economic incentives, ensuring that the most supported pools receive enhanced token emissions.
Cyclic Voting Periods: Voting cycles are conducted every three Sui epochs (with one epoch equating to 24 hours), allowing for regular updates and adjustments from the community.
Rewards for Participation
Trading Fee Share: Users who lock their dragon-bees alongside their LP positions in an AMM pool receive 50% of the trading fees collected by that pool, distributed in HIVE and HONEY tokens proportional to the energy and health points of the locked dragon-bees.
This incentivizes users to stake for pools which will earn more trading fees.
Bribe Incentives: External protocols and meme-coin projects can offer bribes to incentivize users to support their pools. These bribes, denominated in the coins supported by the pool, increase the attractiveness of staking with particular pools.
This will enable 3rd party projects to bootstrap liquidity in their AMM pools.
Projects launching meme-coins on DegenHive by default allocate a percentage of their total supply as bribes, distributed over a predefined number of cycles to dragon-bee eggs staked with their AMM pool.
Note that only the LPs who stake dragon-bee egg along with their LP position will receive HONEY emissions. Users who stake LP tokens but do not stake a dragon-bee egg will only receive HIVE emissions.
Impact on Dragon-Bees
Enhanced Growth: The energy and health points of dragon-bees increase significantly when staked with AMM pools, as both emission rewards and trading fees contribute to their development.
Preparation for PvP Battles: With the upcoming launch of PvP battle games, locking dragon-bee eggs with AMM pools will serve as an effective strategy to "recharge" dragon-bees, preparing them for engaging in combat and other game sessions.
How Emissions are Allocated in DegenHive’s AMM
As mentioned above, At DegenHive, users leverage dragon-bee eggs by locking them with liquidity pools (LP pools) to influence the distribution of HIVE and HONEY token emissions. This voting mechanism ensures that pools with higher user engagement receive a larger share of emissions. The formulas below detail how these distributions are calculated: 1. HIVE Distribution Formula: The amount of HIVE a pool earns per epoch is determined by the proportion of energy points that the pool holds relative to the total energy points staked across all pools.
2. HONEY Distribution Formula: Similarly, the HONEY each pool receives is based on its share of health points compared to the total health points across all pools.
LP Stakers' Earnings Calculation: LP stakers’ rewards in both HIVE and HONEY are calculated based on the amount of LP tokens they have staked in a pool, proportionate to the total LP tokens staked in that pool.
These formulas ensure a fair and transparent mechanism for distributing token emissions based on the active participation of users and their contributions to the liquidity of the pool, while promoting a community-driven approach where the allocation of resources is directly influenced by the engagement level of the participants.
Adding 3rd Party Incentives as LP staking rewards
Each PoolHive is capable of supporting up to three third-party rewards simultaneously. These rewards can be added by submitting a proposal through the pool governance mechanism managed by the PoolHive.
Additionally, proposals can be passed to update mathematical or fee-related parameters for the LiquidityPool governed by the PoolHive.
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