Effective Liquidity Farming

By providing liquidity on Evora, LPs can not only get huge transaction fee income, but are also eligible to earn extra rewards from the liquidity farming.

Different from an AMM dex that usually gives out fungible LP tokens to their liquidity providers, Evora gives their liquidity providers a unique LP NFT for every liquidity position created on its protocol. We use NFT as a tool to record the information of liquidity positions, including the liquidity amount, price range, fee tier, etc.

For those trading pairs with farming option enabled, we follow the fee performance strategy by default. Under this mode, effective LPs will enjoy farming incentives automatically after adding their liquidity with no need to stake their LP NFT. Users can stake their eligible LP NFT into a farming pool that follows the overlapping range strategy or into a farming pool offered by a third party if available to earn bonus.

• Fee Performance Strategy

In a concentrated liquidity protocol, only those positions in active price ranges will be utilized by traders and can generate transaction fees. Therefore, the fee performance of every liquidity position can be an effective metric to evaluate its actual contribution to the protocol. We use this metric to determine our default farming incentive distribution.

The system will periodically scan the newly generated fees out of all the positions in the CLMM pool, and will calculate the proportion of the fees generated by every user's liquidity position. The farming incentives will be distributed to all LPs according to their proportions in the generated fee contribution.

This strategy has following major characteristics:

• Absolutely fair: Because this strategy is fully result-oriented and only the liquidity that is actually utilized by swap transactions is considered effective, it can incentivize those liquidity providers who have made the most contributions fairly and precisely.

• Follow the fee earnings and amplify the revenue: This strategy can effectively amplify LPs' revenue from those mainstream token pairs. In these mainstream trading pools, the trading volume is usually very high, so a lot of professional liquidity providers prefer to add liquidity in these pools. These professional liquidity providers are good at frequently adjusting their price ranges to manage their liquidity position. In this way they can achieve a higher transaction rate and higher fee earnings. The fee performance strategy will bring even more extra rewards from the farming to these high-performance users. This will naturally attract those professional liquidity providers to join.