πFarms
Introduction
Yield farming in cryptocurrency refers to the process of earning a return on capital by putting crypto assets to productive use in a decentralized finance (DeFi) market.
Investors, known as liquidity providers, stake or lock up their crypto assets in a liquidity pool, which is essentially a smart contract containing funds. In return, they earn rewards, typically in the form of additional cryptocurrency. These rewards can come from various sources, including interest from lenders, trading fees generated from the underlying DeFi platform, or other incentive mechanisms designed by the protocol.
Yield farming strategies often involve moving assets around between different pools to maximize return on investment, and this can require a high level of expertise and awareness of the associated risks, such as impermanent loss or smart contract vulnerabilities. LinqAI will provide the ablility to hold your $LNQ in a yield farm that pays back a percentage APY dependant on how many tokens you lock away and which farm you chose to lock your tokens in.
Single Side Staking
Single-side staking in decentralized finance (DeFi) involves depositing a single type of cryptocurrency into a smart contract to earn rewards, unlike dual-asset liquidity pools. Users stake assets like Ethereum (ETH) or a native token for various purposes, including transaction validation or providing liquidity.
This staking offers rewards such as additional tokens or interest, with the rate depending on the protocol. Benefits include reduced risk of impermanent loss and potential governance rights in the DeFi platform.
Liquidity Pool Staking
$LNQ, launched on the Ethereum blockchain, can be paired with Ethereum (ETH) to create a liquidity pool in the DeFi ecosystem. This pool, based on smart contract balances of LNQ and ETH, allows users to exchange these tokens.
Liquidity providers contribute LNQ and ETH, earning rewards like transaction fees and potential yield farming or staking incentives. Automated Market Makers (AMMs) facilitate trading within the pool. However, providers should be mindful of risks such as impermanent loss and smart contract vulnerabilities.
Impermanent Loss
Impermanent loss in decentralized finance (DeFi) occurs when the price of assets in a liquidity pool changes compared to when they were deposited. This typically happens in pools with two or more assets, like Ethereum and a token. As the relative value of these assets shifts, the pool's asset ratio changes, potentially leading to a loss for liquidity providers when they withdraw their assets. This loss is 'impermanent' because it's only realized if the provider withdraws the assets; if the prices return to their original ratio, the loss can be reversed. Despite earning transaction fees, liquidity providers must be aware of this risk, especially in volatile markets.
LinqAI Farms
Initially LinqAI will only be providing Single Side Staking Farms to its token holders (see below). However you are still able to create LP tokens on Uniswap where you will earn a small percentage of each trade that occurs on the blockchain for $LNQ.
We recommend that you only take part in purchasing LP tokens if you understand what you are doing and you know the risks of Impermanent Loss (see above)
Every 15 seconds 20 tokens approx (block time on ethereum dictates the exact amount) are allocated to the 3 farms as rewards. The breakdown of those 20 tokens are as follows:
We have established three distinct farms, each characterized by varying lock-in periods:
Byte Farm - 60 days lock-in: 2 token per block (15 seconds)
Tensor Farm - 90 days lock-in: 6 tokens per block (15 seconds)
Quantum Farm - 180 days lock-in: 12 tokens per block (15 seconds)
Across these farms, a combined total of 20 tokens is distributed every 15 seconds into a shared pool, equating to 80 tokens per minute, 4,800 per hour, or 115,200 tokens daily.
To encourage participation in farms with longer lock-in periods, we've structured the token allocation as follows:
60 days - Receives 2 out of every 20 tokens, amounting to 11,520 tokens daily.
90 days - Receives 6 out of every 20 tokens, amounting to 34,560 tokens daily.
180 days - Receives 12 out of every 20 tokens, amounting to 69,120 tokens daily.
In a scenario where you are the only participant in a farm, with a singular token, you would accrue all the rewards allocated to that farmβbe it 12, 6, or 2 tokens, depending on the farm's lock-in period.
Reward distribution is based on the percentage of the farm you own. For example, owning 10% of the farm with a 180-day lock period entitles you to 1.2 tokens every 15 seconds. (12 being the total amount allocated every 15 seconds to that farm)
It's important to note that the key factor is not the quantity of tokens you hold, but the percentage of the farm you control. Naturally, owning more tokens increases your percentage share of the farm, thereby enhancing your portion of the rewards dispensed every 15 seconds.
*The company reserves the right to input and withdraw tokens into the farms in order to maintain a respectable APY and rewards system
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