Pool FAQs
What are the fees on Mining pools?
In order to fund sustainable development of the platform, xToken charges a small fee on several user interactions. On pool deployment, the pool creator pays a fee of 0.2 ETH. This is a one-time fee. Additionally, the pool creator/sponsor pays 1% of any rewards tokens distributed. For example, if the pool creator sponsors a 100k XYZ rewards program, they will pay 1k XYZ in fees. Finally, xToken earns 5% on any reinvested LP fees. This is only charged when pool sponsors reinvest accumulated Uniswap V3 LP trading fees back into the pool.
Why does Mining not allow pool managers to rebalance the pool's liquidity to a new price range?
xToken made a conscious decision not to permissionlessly expose the price range rebalancing functionality for several reasons.
The first reason is that on-chain rebalancing automations are vulnerable to frontrunning and other forms of value extraction. When you broadcast your rebalancing strategy programmatically on chain, you are inviting bad actors to extract value from your LPs.
The second reason is that the mechanics of Uniswap V3 are quite complex. Unless you have developed an expertise in liquidity provision and management on Uniswap V3, the likelihood of executing a rebalance poorly or incorrectly is elevated.
While some other projects built on top of Uniswap V3 offer automated rebalance strategies, we believe this is dangerous and prone to loss of value. However, we are exploring an approach that allows a pool manager to execute rebalances via an off-chain strategy.
What price range should I select for my Mining Pool?
As we explain in the Create Pool instructions, the Uniswap V3 price range you choose for your incentivized pool is immensely important. You cannot modify this range. You will need to migrate to a new pool or deploy multiple Mining pools if you want new or different price ranges.
If you're unsure what price range to select, we recommend selecting the full price range. This is a configuration similar to a Uniswap V2 or Sushiswap pool where there will be a price quote at infinite ends of the price range. One token can increase in price by 100,000% or decrease by 99% relative to the other and your pool will still be "in range." For projects incentivizing volatile pairs that do not have a stable or well-established market price, selecting the full range is likely the appropriate choice. We make it easy to do this on the UI. Select the full range option under the price range toggles.
If you're more confident in a certain price range during the period you want to run an incentives program or if you're planning on running multiple pools with different price ranges alongside each other, you should consider configuring price ranges slightly wider than your initial instincts. Be aware that when the active price on a Uniswap V3 pools reaches or surpasses one end of your range, your LPs will be left with 100% of one token or the other. As an example, consider a WETH<>USDC pool with a WETH price range of $1000 to $2000. If WETH is trading at $2000, your Mining pool will be comprised of 100% USDC. If your rewards program is still active, you will essentially be incentivizing unusable liquidity (at least until price corrects into your range).
Why do I need to deposit more of one token than another?
When contributing to a pool with a concentrated price range, you'll likely be prompted to deposit more of one token than its counterpart. This is because deposits on Uniswap V3 are a function of 1) the current price on the pool and 2) the price range of the position. If the current price on the pool is closer to one end of the range than the other, the ratio of assets to deposit will be weighted as well.
Does xToken or a pool sponsor have access to my funds?
No, never. xToken has no custodial access on liquidity pools. Additionally, pool sponsors have no custodial access to your deposited liquidity. However, this does not mean that providing liquidity is without risk. A pool sponsor may have admin rights on one or both of the underlying tokens in the pool. As xToken is a permissionless platform, it is imperative that you do your own research on the sponsoring project and the underlying tokens.
For a limited time, we will maintain upgrade power on the RewardEscrow contract to ensure smooth operation. We will relinquish proxy ownership once we're assured that the contract is working as expected.
Why are rewards sometimes vested for less time than the stated vesting period?
For pools with vesting periods, LPs "claim" rewards and a clock starts on the vesting period for those claimed tokens. Due to the constraints of the Solidity programming language, we need to protect against certain edge cases. As such, an LP can only have one "vesting entry" per week. If an LP claims rewards with a six week vesting period and then claims again 6 days later, the second claim will be added to the initial claim, meaning that the latter batch of rewards will technically have a shorter vest period. Once a week has passed from the previous vesting entry, a new one will be created on future claims.
Does Mining work with non-standard tokens?
We advise against deploying Mining pools with rebasing tokens, tokens with more than 18 decimals or fee-on-transfer tokens.
Last modified 8mo ago