🌽What are yield farms

Why LPing is worth it

Taraswap is using The Uniswap v3-staker module to incentivise LPers.

What is the Uniswap v3-staker module

The Uniswap v3-staker module is a tool that incentivizes liquidity providers (LPs) to add liquidity to specific Uniswap v3 pools by offering additional rewards on top of trading fees.

Tl;dr

What is the v3-staker Module?

• It’s a liquidity mining program designed for Uniswap v3.

• Projects can create incentive campaigns to reward LPs who provide liquidity to certain pools.

• Rewards are distributed in the form of tokens (e.g., a project’s native token or stablecoins), directly on-chain.

Why is it good for LPs and the whole market

1. Earn Extra Rewards:

• In addition to earning trading fees, LPs also get extra rewards from the staking campaign.

• Example: A token project rewards LPs with their token for providing liquidity in an ETH/TOKEN pool.

2. Boosts Yield:

• Combining trading fees with staking rewards can significantly increase your overall return on investment (ROI).

3. Flexibility:

• You can choose the price range to provide liquidity and still qualify for rewards.

• The module tracks both your liquidity and your active range.

4. Encourages Participation:

• New projects often use this to bootstrap liquidity, giving LPs opportunities to earn high rewards early on.

5. No Lock-Up:

• Unlike traditional staking, you can adjust or withdraw your liquidity at any time without penalties.

• Rewards are prorated based on the time your liquidity stays active.

Risks to consider

• Impermanent Loss: Providing liquidity still carries the risk of impermanent loss. This article is great to understand IL.

• Gas Costs: Adding liquidity, staking, and claiming rewards involve gas fees.

• Reward Token Volatility: The additional rewards might lose value if the token price drops.

FAQ

We have an FAQ page at https://www.taraswap.app/#/farms/faq that explains in detail what and why does our Incentive Program add to the liquidity landscape.