ShapeShift DAO, a Decentralized, Non-Custodial Digital Asset Platform, Extends Farming Rewards

The community behind the ShapeShift DAO has “spoken,” so FOX Token farming rewards have reportedly been extended, according to an update posted on February 22, 2022.

ShapeShift, a digital asset platform that transitioned into a DAO, notes that if you are farming your FOX Tokens, you should “unstake and move your LP tokens to the new yield farming contract to participate in the new round.”

As mentioned in a blog post from ShapeShift, the new pool may be accessed here.

A Two-Pronged Approach

The ShapeShift DAO has “approved the continuation of liquidity mining incentives in the Uniswap FOX/ETH pool, effectively extending and modifying the current liquidity mining rewards.”

The new strategy will “maintain liquidity mining rewards near or at current levels for an additional four and a half months while at the same time aggressively increasing the DAO’s Olympus Pro bond LP token purchases.”

The update also mentioned that the advantages for the DAO and FOX token holders are considerable; thus, the community sentiment around this proposal “was positive, reaching 4.75M of votes in favor”

Farming Rewards

The program enables FOX holders to offer liquidity on the decentralized exchange Uniswap v2 while being able to stake their liquidity provider tokens in the ShapeShift staking rewards contract “for a proportional share of the distributed FOX tokens over the four and a half month period.”

As confirmed in the update, the ShapeShift DAO will “continue its rewards in the Uniswap FOX/ETH pool targeting a 75% APR or higher (funded with 13.5 M of FOX over the period).”

FOX token holders will “continue to enjoy farming rewards and earn FOX,” the update confirmed.

LP Token Purchases via the Olympus Pro Bond

The strategy should enable the DAO to continue its liquidity mining rewards while also “using its ample FOX reserves to begin purchasing its own liquidity via the FOX/ETH Olympus Pro bond.”

This new approach of enabling protocols to hold their own liquidity is significant. It enables initiative’s to “maintain liquidity pools without relying on third parties to supply the liquidity.”

As noted in the update, “rewarding third parties for liquidity providing brings associated risk — for instance, increasing the influence of ‘mercenary’ liquidity providers who quickly head for the exits and sell a token soon after earning rewards.”

Specifically, the DAO will “fund an initiative over the following four and a half months to purchase FOX/ETH LP tokens via the Olympus Pro bond, targeting $40 million worth of liquidity.”

The LP tokens will also “serve to diversify the treasury.” The update also noted that “an increased amount of protocol-controlled-value could also be helpful in severely adverse market conditions since ShapeShift can more directly influence if and when liquidity exits the market.”

The update also mentioned:

“The FOX/ETH farming program is the DAO’s largest expense. Buying the LP bonds will reduce the need for future liquidity mining programs. In addition, the purchased LP tokens could be staked in the ShapeShift farming contract, resulting in the reclamation of up to 90% of the funds spent on liquidity mining.”

As noted in a blog post, the innovation of the ShapeShift DAO has “exploded in recent weeks, and these programs are just one component of the many … contemporary prongs on this busy platform.”

The FOX Token has been their way of “giving extra utility to those who support the ShapeShift platform and community (starting with no trading fees in 2019).” Now, FOX is becoming “the entire control and ownership structure of the project.”

As noted in the blog post, the ShapeShift DAO is being “powered by SafeSnap (SnapShot + Gnosis Safe), which means community members can propose and vote on proposals with zero gas fees, and the result of those votes can trigger on-chain transactions.”

Voting power “applies to those with FOX in their wallets and includes FOX in the FOX/ETH Liquidity Pool on Uniswap,” the announcement noted.

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