An additional reward to incentivize Lixir's liquidity providers

'Farming' refers to the act of being rewarded for staking or providing liquidity in a token different from the asset(s) being staked or LPed. In Lixir's case, this token is the protocol's governance token $LIX, and it's distributed to all liquidity providers. Note that this distribution is different from the $LIX distributions funded with the revenue from the Performance Fee.

Lixir's farming model is in large part similar to Curve's farming model, and hence relies on a system of 'liquidity gauges' that tracks each liquidity provider's share in each of the Lixir Vaults. Each gauge is given a 'type weight' that will either increase or decrease that gauge's share in the total farming emission w.r.t. the other gauges. By staking your LV tokens in the corresponding gauge, you're rewarded proportional to the amount of liquidity you're providing.

This is done in such a way that lower risk pairs that bring in significantly less revenue per dollar liquidity receive a lower $LIX farming emission than riskier pairs that bring in significantly more revenue per dollar liquidity. The type weights can at any point be changed through a LIP if the DAO wishes to do so.


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