Liquidity
Davos Protocol plans to enable DAVOS and DGT holders to stake, swap, buy, sell, and place them into liquidity and farming pools on external DEXs. It will be up to the DEXs to determine the terms of participation in liquidity pools as well as the amount of the rewards for liquidity providers and the trading fees for contributing. The LPs will be incentivized with DAVOS or DGT tokens as farming rewards. The inclusion of DAVOS and DGT tokens into external DEXs will contribute to improving the overall trading experience of Davos’s native cryptocurrencies with seamless swaps, dramatically reduced trading fees, and more advanced trading mechanisms. As more people trade, users can earn a share of transaction fees (Liquidity Mining), on top of their DAVOS or DGT staking rewards from respective DEXs.
Larger liquidity pools create less slippage and result in a better trading experience. Thus, DAVOS and DGT liquidity providers will be rewarded with extra tokens for supplying liquidity to certain pools on external DEXs.
Yield farmers can supply DAVOS or DGT tokens to the liquidity pools of various protocols and get rewarded with fees that are charged for swapping different tokens. Again, liquidity mining can supercharge this, so for example by supplying coins to certain liquidity pools, farmers are rewarded with extra tokens.