Why does SakeSwap support Trade Mining?

Why does SakeSwap support Trade Mining?

Trading volume is the most important indicator for an exchange which reflects the value of it. With the AMM mechanism, the transaction volume contribution consists of two parts, one is the active trader and the other is the passive trader.

Active traders are the main way for swap users to contribute transaction volume.

Passive traders contribute liquidity to the AMM.

To date, all of the yield farming on various swap platforms is not incentivised according to the liquidity contribution. Trade Mining provides an incentive to use platforms that provide this service.Yield farming provides an incentive for passive traders, but not for active traders. Sakeswap introduces a more efficient incentive mechanism for traders which is Trade Mining. SakeSwap Trade Mining is different from the traditional centralized exchanges which is deployed based on smart contract.

Incentive Mechanism of Trade Mining

  1. To provide incentives for active traders on SakeSwap who contribute the volume. In the other word, the higher the trading volume, the more sustainable incomes the liquidity provider can have.
  2. To provide incentives for the Initial SakeSwap Offerings (ISO) projects. Projects can offer their community more incentives with SakeSwap Trade Mining and Yield Farming mechanism.
  3. To provide incentives for the ecosystem partners. At the beginning, SakeSwap TVL reached $530 million. At that time, the whales is accounted for a large proportion, squeezing the value space of the shrimps. The shrimps are the basis for the contribution of active transaction volume on SakeSwap. ISO projects may provides small amount of volume at the beginning. SakeSwap Trade Mining aims to balance the whales and shrimps through providing an efficient incentive mechanisum for both of them.

The features of Trade Mining on SakeSwap

Trade Mining is an incentive mechanism for LPs and SAKE token holders who contribute to SakeSwap. Trade Mining is not designed to allow arbitrageurs to extract the value of SakeSwap.

That being said, SakeSwap’s Trade Mining has the following features:

  1. To combine Trade Mining with Yield Farming. The transaction mining pool supports LP Yield Farming. More importantly it supports the LP token alongside the S Token for farming. This is primarily for the transaction volume contributors. As a result, we’ve expanded active trading volume contribution by 100 times. The final calculation weight is measured by the LP token + the S token multiplied by 100.
  2. Trade Mining helps to avoid whales from squeezing the value away from small transaction users. This is accomplished by borrowing the same mechanism from Bitcoin Mining machines, the transaction mining pool is designed as non-extractable. Just like in Bitcoin mining mechanisms, the purchase of a mining machine is a one-time cost investment, which can only be used to capture continuous value through mining revenue. This is also the support for the value of all SAKE.
  3. Trade Mining currently only supports ETH-SAKE LP trading pairs. However, after the handover to community governance, additional transaction mining pools will be added.

How can Trade Mining and Yield Farming better support token listings on SakeSwap?

The most important requirement for us, is to make sure we create value for the project parties as well as the early community supporters. However, many initial release projects encounter the problem of value lost between value discovery and early community supporters resulting from third parties extracting value from CEX or DEX. Trade Mining and Yield Farming provides a mechanism to help early supporters of a project, namely small transaction users, as well as the project itself to form a value exchange chain.

This allows the discovery of value to be completed on a consensus basis. All projects are welcome to list on SakeSwap after considering this point carefully. Sakeswap is launching a token listing tool that will allow initial listings to release dual mining right from the start. Projects can list using the Sake+ project token dual mining mechanism to help the project party complete the seamless connection between value discovery and early community support.



Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store