Core concepts
Competitive Farming
Competitive Farming is a highly unique system built by the RAMSES team that allows for the scale of paid emissions to individual users based on their efficiency of their liquidity. Please keep in mind that we will cover Concentrated Liquidity later in Creating Liquidity & Farming, this section is focused on how rewards are paid to users NOT how to create Concentrated Liquidity positions!
What is Competitive Farming?
Competitive farming can be simply explained as a method of rewarding LP providers in which the most 'competitive' and productive liquidity is rewarded the highest. In concentrated liquidity models, users/actors choose their liquidity ranges which they want to provide LP to. This opens the possibility for a user to choose any amount of tick ranges between 0 and infinity.
What are the benefits?
The more optimized a user's range is, the higher rewards they earn. This naturally creates an alignment of liquidity provisioning with the growth of the PHARAOH. The ultimate goal of incentivizing liquidity is that you are driving more favorable swap routing towards pairs, for aggregators to pick up on. Concentrated liquidity is multiple times more efficient in bringing volume to a pair with regards to the dollar amount of liquidity provided.
Higher fees are achieved as a result of more swap volume directed towards PHARAOH CL pairs. Thus vePHAR holders are able to earn more real-yield in the underlying tokens of the pairs.
How does this differ from other models?
One of the greatest strengths of Concentrated Liquidity is that its order-book style approach to token liquidity allows for low slippage trading. It outpaces old-style liquidity 5-10x in terms of better price execution which notably leads to much more trades being routed through these positions and thus fees also increase 5-10x. However, as you will come to learn, the trade-off is a position that is much more subject to impermanent loss being incurred. The goal for any provider is to adjust their positions consistently and often enough that the fees earned outpace these risk. This task can be daunting for new-comers and even veterans.
At Pharaoh we not only give 50% of the fees back to the users we also allow for our emission model of the PHAR token to help pad your position to ensure less risk incurred for parking liquidity on our platform! On top of that, you are battling for emissions of any given pair against other LP'ers!
Your efforts on Pharaoh are paid in full as the tighter your ranges, the more active your liquidity, the higher earned rewards get! This allows us to continually pay for the liquidity earning the platform the most revenue and kill off any unproductive/inactive positions.