Liquidity Mining

The process in which you put your assets to work to generate returns is called Yield Farming. Being a yield farmer means that you are actively looking for the best strategy to maximize your profit from your initial funds. Such a strategy requires you to adjust your position from week to week, finding the pool that is offering the best annual returns (APY) at the given time. Usually, the percentage of returns is directly proportional to the risk of the pool. However, like with any other investment your strategy needs to be crafted around handling the risks.

Liquidity mining is a result of yield farming. The process involves getting tokens as a bonus besides the usual returns. Currently, there are 2 ways to earn our free governance token (BUNI):

  • Stake BUNI, earn BUNI via our first BUNI pool. In the future, you can stake BUNI to earn more kinds of tokens as we’re onboarding new token teams to the platform.

  • Stake BPT (Buni Pool Token), earn BUNI. BPT is what you get after you provide liquidity to an AMM pool.

However, there is one issue with most of the liquidity mining platforms: users tend to dump their tokens they get from the mining pool immediately because that’s not something they bought but something they are given. Also, a high APY yield farming program also comes along with a high inflation rate of the token supply. We have been observing this for quite a long time and wanted to propose a solution that can lock-up these farming rewards out of circulation while still providing value to liquidity miners.

To address this problem, we introduced a new liquidity mining model by wrapping up farming rewards (VBUNI) into NFT collectibles. Users can then use these NFT to convert VBUNI into the actual BUNI tokens after a vesting period. In the meantime, they can also trade/auction these NFT in other well known marketplaces and make them liquidable.