This article covers frequently asked questions for Verse Farms on Bitcoin.com’s Verse DEX. For step-by-step instructions on how to use Verse Farms, please see this guide.
What are Verse Farms?
Verse Farms are a collection of smart contracts on Bitcoin.com's decentralized exchange Verse DEX where Liquidity Providers (LPs) can deposit LP tokens to earn rewards. Farm rewards are paid on top of the trading fees you already earn by providing liquidity.
What are liquidity pools and liquidity pool tokens?
A liquidity pool is a smart contract-based reserve of two tokens, allowing for automatic, decentralized trading and earning of fees for those who provided the tokens. When you deposit into a Liquidity Pool, your assets are transferred into the smart contract, and you will receive liquidity pool (LP) tokens which represent your deposits in the pool.
Why should I deposit my LP tokens with Verse Farms?
When you deposit tokens in Verse Pools as a liquidity provider, you will receive LP tokens as a representation of your share of the pool. Instead of simply leaving these LP tokens in your wallet, you can deposit them into Verse Farms to earn additional rewards, on top of trading fees that you are already earning as a liquidity provider.
What types of Farms are available?
The currently available farms are:
VERSE-ETH
DAI-ETH
ETH-USDT
ETH-USDC
ETH-WBTC
WBTC-USDC
More Farms will be announced over time. Check https://verse.bitcoin.com/farms to see the most up-to-date list of Farms and their APYs.
What rewards are available on Verse Farms?
Currently all farms payout rewards in VERSE. Check https://verse.bitcoin.com/farms for the reward distribution rate. Stay informed of future announcements by following our Twitter or joining our Discord and Telegram channels.
How is the APY calculated?
APY for Pools are based on the LP rewards generated in the last 24 hours multiplied by 365 days.
Is there a minimum requirement of LP tokens for a deposit into a Verse Farm?
There is no minimum requirement.
Is there a lock-in period for a Verse Farm?
There is no lock-in period. You can withdraw you LP tokens from the farm at any time.
How do I claim rewards from a Verse Farm?
Connect your wallet to https://verse.bitcoin.com/farms
Enter the farm you wish to claim rewards from
Click on “Claim Rewards” to claim farming rewards
Follow the instructions on screen to complete your claim
Alternatively, you may wish to withdraw all the deposited LP tokens from the farm, and you will automatically receive any unclaimed rewards.
How do I withdraw from a Verse Farm and claim rewards at the same time?
Connect your wallet to https://verse.bitcoin.com/farms
Enter the farm you wish to withdraw your LP tokens from
Click on “Withdraw”
Enter the amount you wish to withdraw, or click MAX
Follow the instructions on screen complete your withdrawal
If you withdraw the full amount (MAX), you will automatically receive any unclaimed rewards.
Have the Verse Farm smart contracts been audited?
Yes, all of the Verse Farm smart contracts are audited and published for public review here.
Where do the Verse Farm rewards come from?
Verse Farm rewards come from the Verse Ecosystem Incentives program. Specifically, 35% of the Verse token supply is allocated to rewards distributed via yield farming, staking, airdrops, and other mechanisms. Tokens are made available to the incentives program linearly and on a block-by-block basis over 7 years, although their distribution is managed by the Bitcoin.com team. The purpose of the program is to widely distribute VERSE and incentivize community growth in a sustainable and value-adding way. Please refer to our white paper here.
Why are you offering rewards and is this sustainable?
Verse Farms rewards are part of the Verse Ecosystem Incentives program, which has the goal of widely distributing VERSE and incentivizing community growth in a sustainable and value-adding way. Verse DEX is a core piece of infrastructure for the wider Bitcoin.com/Verse ecosystem, so it is imperative that Verse DEX offer a best-in-class decentralized trading experience. Verse Farms rewards specifically are designed to incentivize the growth of liquidity on the Verse DEX. Liquidity, as measured by total value locked (TVL), is a key measure of the health of a decentralized exchange.
Other DEXs have offered very high APY in an attempt to attract TVL. However, this generally only succeeded for short periods of time. A key reason for the failure is that the protocol, which typically has a non-linearly emissions curve, is unable to sustain farming rewards. The DEX is thus unable to reach a critical mass where users trade enough to generate sufficiently attractive APY (via fees) for liquidity providers. In other words, when farming rewards die, so too does the DEX. By contrast, the Verse Ecosystem Incentives program’s 7-year linear distribution means that Verse DEX is able to offer an attractive APY over a long enough time frame to overcome the challenges of bootstrapping a two-sided marketplace.
What is APY?
APY stands for annual percentage yield. It is a way to calculate interest earned on an investment that includes the effects of compound interest. Read more about this here.
How are rewards from VERSE Farms distributed?
Farm rewards are allocated to individual users based on their proportion of LP tokens deposited in the Farm and the time (per second) those LP tokens are held in the Farm. The rewards model may change from time to time so stay informed of future announcements by following our twitter or joining our Discord and Telegram channels.
APY is not a good metric to track returns. Why don’t you use X?
APY is a simple metric for users to compare opportunities quickly. There are variations of APY that we are considering implementing, such as variable APY, that may provide a more accurate representation of Farm rewards. In addition, we are exploring alternative ways to present returns to users, which would integrate token inflation and compounding effects if any.