Why Sponge Finance Layered Farming will save the world ?!!
Spoilers : it won’t 💩 ! But you should definitely check why this a way better than what you expected !
Hello Spongers, this is Decentralized Stef again, and today my goal is to make you understand why this feature is awesome and what is the main mechanism behind our layer farming and why it differs from other platforms !
Basically most of you know how layer farming works, but just a quick reminder :
- Each layer is like a full new dapp with a new token to farm, new pools, new farms. We don’t have the name for the layer token yet, but you will have something like $SOAK1 for first layer, $SOAK2 for second layer, $SOAK3 for third layer and so on…
- Layers are time & supply limited, however the token stays forever.
- New layers will be created every few weeks.
- Fees generated from depositing into the layer are used to buy back the token of the current layer but also the main token of the platform, which is $SOAK in our case (that will be burn), but also a bit of $SPG that will be distributed for stacking the current layer token.
- Previous layer token can be used to farm the current layer token. For example you will be able to farm some $SOAK3 by stacking $SOAK2
- Also $SOAK will be able to farm each layer.
- There will be a pool where you stack the current layer token with $SPG as rewards (coming from the fees buyback of the layer farms).
… I know what you think… “That’s nice but this is super pump & dump schema… Token will probably rise during the first hours then dump to the abyss…”
I think you are right and that’s what happened to most of the other platforms offering layer farming.
This is mostly why we are taking sooooooooo muuuuuch tiiiiiiiiime to finish layer farming, we wanted to find a solution to layer farming so the layer tokens will NOT only dump and will probably make you loose money.
So here is how we will solve layer farming !
We will do like vampires, we will drain liquidity from other platforms !
Let me explain :
Basically every layer farms will be a token pair that can be stacked in another platform.
Let’s take BNB/BUSD LP for the example… When a user stack BNB/BUSD LP on our layer farming feature we will reward him with the token of the layer, BUT a smart contract will, behind the scene, also use his LPs and stack it on another safe platform, let’s say PancakeSwap in this example. So the contract will be able to earn cake token with the LP of the user, while the user earn some layer tokens…
But those $cake are not directly given to the user, instead, those $cake will be sold to some locked liquidity, Cake/BNB in this case, and this new generated liquidity will be stacked and locked forever into PancakeSwap Cake/BNB Farm. And the rewards from this generated locked liquidity will be sold to buy back and burn the token of our layer forever !!! This means infinite liquidity draining from cake (in this example) to the layer token !!!
To sum up :
- For users no changes, you will stack your LP and earn the current layer token. Users can claim rewards when they want or withdraw their LPs whenever they want, like every usual farms.
- But while your LP are stacked in our farms, a smart contract will use these LPs and stack it also in another ‘safe’ protocol (like PancakeSwap).
- The earning from the safe protocol (cake in the example) will be turned into LPs that will be stacked and locked into the safe protocol, also earning rewards.
- Theses rewards will be daily sold to buy our layer token, so increasing the layer token price !
- Once bought the layer token is destroyed forever, so the supply will constantly be reduced.
But that’s not all we have a lot of small improvements !
So basically we have tons of ideas, which will be implemented on the fly, some will be available at layer 1, but others will come at layer 2 and later. This is one of the huge advantage of layered farming, contracts can evolve easily between layers.
I want to keep most of these improvments as surprises for later, but here is one that concern $SPG holders ! $SPG holders will be able to reduce deposit fees from layer farms !!
For example if user A does not hold $SPG, deposit fee to enter the BUSD/BNB Farm will be about 4%. Remember that those fees will mostly benefit to $SOAK holders (with buy back & burn)
But if user B is ELITE rank, which means he hold 250 $SPG in his wallet (and passively earning $SPG redistribution… this user B is definitely a smart guy 😋 ), his deposit fees will only be 1.5% !
WEN WEN WEN SIR ?!
I would say between the end of this week and next one, depending on issues found in the test phase.
That’s all for now, I will do another Medium article when releasing the layered farming, exposing every mechanics and contracts. I hope you like the idea behind, I’m happy we are finally close enough from release so I can share our work with you guys !