The Mute Switch Amplifier Liquidity Program
Oct. 20, 2021
With the upcoming release of the Mute Switch Testnet on zkSync 2.0, we have been working on our farming incentive program for the Switch, and we’d like to share how it will work. We built a system that will reward long term supporters and all around value additions to the network. There are two main aspects to incentivizing liquidity and value into our ecosystem:
Switch Farming dApp Program
Mute Amplifier Program
Switch Farming dApp Program:
To encourage initial and interesting liquidity pairs to the Switch, our farming dApp will include multiple trading pairs that will have solid ROI for traders and investors. These initial trading pairs will be in collaboration with initial partners that will be supporting our ecosystem, as well as larger pairs that we know will benefit the ecosystem (e.g. ETH/WBTC, ETH/USDC).
Not to be confused — the Switch is a permissionless DEX and any token pairs can be added by anyone. The Switch Farming Program however, will allow users to farm rewards based in Mute for specific trading pairs on the Switch by adding LP.
With this system, we are happy to announce that rewards will be compounding, meaning payouts can be claimed at any time without removing your base farming LP. This is an important feature that will help ROI growth along with our Amplifier Program. Additionally, farming rewards will be fueled by trading fees from the Switch via the smart treasury. At initial launch, the base incentivized pairs will be bootstrapped by our current treasury.
Mute Amplifier Program:
As ROI can fluctuate with certain LP pairs on our farming dApp, there will be an option to increase your base earning ROI by participating in our Mute Amplifier Program. The Amplifier Program for Mute Switch will allow users to increase their ROI by staking/holding Mute.
Attention, holders! The Mute Amplifier Program will allow users to increase their ROI by staking/holding Mute.
Check out this example: User A is providing LP for ETH/WBTC and the ROI rate is 30%(base) — 65%(max). By holding/staking a specific value of Mute, User A is able to achieve the maximum of 65% ROI. Without holding/staking Mute, they will be receiving the base ROI of 30%. The equation of ROI with our Amplifier Program is as follows:
ROI Base + ((ROI Difference) * (Value of Mute) / (Value of LP))
In the case of our example, having LP worth $20,000, and additional Mute worth $10,000, the ROI being earned for this pair would be 47.5%.
30% + ((35%) * (10,000) / (20,000)) = 47.5%.
ROI is capped at the max amplified value. Your Mute is not applied to an individual pair, as your amplified ratio can carry over to as many pairs as you are providing liquidity for in the Farming Program. This incentivizes users earning Mute from farming to hold/stake them to continue to grow their ROI.
These details are subject to change upon release.
Since our mainnet launch of Mute Switch is dependent on the zkSync mainnet 2.0 launch, we'll soon be launching farming liquidity pools on L1 to support Mute/ETH & Voice/ETH trading pairs in the meantime. These farming pools will resemble our Switch Farming & Amplifier Programs, meaning we will have a base ROI and max amplified ROI. Soon, you will be able to stake your Mute or Voice LP and earn strong ROI, as well as get a feel for how the LP incentive programs will operate on Mute Switch mainnet.
In addition, we have several further announcements planned over the course of the next two weeks. Please stay tuned, and thanks for all of your continued support!