Hey Polygon community,
As you are all aware, the Polygon foundation had promised a liquidity mining campaign of [$15M] for Uniswap v3. True to our word, Polygon partnered with Arrakis Finance to kickstart the liquidity mining campaign on Uniswap v3 for the first 3 months ending Jun 30, 2022.
Starting July, we will be giving out $1M in MATIC liquidity mining incentives each month and all dAPPs that have built on top of Uniswap v3 cater specifically to liquidity providers would be eligible. In order to avoid cherry picking, we have decided to distribute the remaining $12M entirely on the basis of individual merit.
Polygon will be partnering with UMA Protocol to launch a 100% KPI based liquidity mining programme for Uniswap v3. Below is a diagrammatic representation of what this would look like:
Polygon will shortlist “n” Uniswap v3 pairs that are eligible for rewards. The pairs selected would be the pairs that generate the most fees in Uniswap v3. Since total monthly rewards are $1M, each pair is eligible to receive “$1M / n” in wMATIC. All active managers are invited to participate and create strategies for how many ever of the “n” pairs as they wish. The above example shows the “wMATIC/USDC (0.05)”. The manager that has the highest “Fees / Weighted Liquidity over 1 month” for “wMATIC/USDC (0.05)” would be eligible for the entire amount of $1M / n. Since active manager “F” has the highest fees, the entire wMATIC reward goes to manager “F”.
Similarly, rewards for every single one of the “n” pairs are up for grabs by the best performing active manager for that particular pair. By following this approach, we ensure that the best managers are rewarded for their hard work and the polygon community is able to enjoy the best Uniswap v3 yields.