Protocol Owned Liquidity
“Protocol-Owned Liquidity” (POL) has always been a focus of the Minswap DEX. POL refers to a protocol owning its own liquidity, in the case of the Minswap DEX, it means the Assets that the Minswap DAO Treasury owns and manages. Below, you can see an Overview of these Assets and their different sources.
Meteor LBE Assets
Minswap was the first Protocol on Cardano to embrace POL through the Meteor Liquidity Bootstrapping Event (LBE). The LBE ensured a fair and transparent way to determine the initial price of the MIN/ADA pair. It also enabled the DAO Treasury to keep 50% of the LP Tokens generated from the event. These MIN/ADA LP Tokens are currently not Yield Farming, however they passively accumulate Trading Fees from swaps and ensure there is sticky and stable liquidity in the MIN/ADA Pair.
Fee Switch Assets
The Fee Switch was activated following a DAO vote. Under the current framework, the Fee Switch refers to redirecting 0.05% of the 0.3% Fee that swappers pay to increase the DAO Treasury’s POL. According to the vote, the Fee Switch deploys the 0.05% of the Fee to increase the MIN/ADA Liquidity, by continually “zapping” the ADA into MIN/ADA LP Tokens. These LP Tokens generate both Trading Fees and Farming rewards.
Minswap Labs offers the service for projects to launch new tokens on the DEX through the Minswap Launch Bowl. As part of facilitating this service, a Fee in the LP Tokens generated in the Event is taken for the Minswap DAO Treasury.These LP Tokens generate both Trading Fees and Farming rewards.