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PARSIQ is happy to announce a liquidity boost program to incentivize PRQ/ETH liquidity providers on Uniswap! Please meet PRQBOOST – a new PARSIQ utility token to increase rewards for liquidity providers!
As you know, liquidity providers (LPs) get Uniswap fees for providing liquidity, since this liquidity allows users to buy and sell PRQ. This is a general scheme for any Uniswap liquidity pool. However, PARSIQ decided to incentivize PRQ liquidity providers further. In addition to Uniswap fees, users will now also be able to get rewards in PRQ for providing liquidity. Thus, they will get more funds for the same liquidity.

How will the bonus program work

To be eligible for getting PRQ rewards for providing liquidity, LPs will need to stake PRQBOOST. The more liquidity and PRQBOOST the user has, the more reward they will get. Let me explain this a bit more in detail.

The bonus score of the user will be calculated as the geometric mean between the number of liquidity tokens that LP holds (shares) and the amount of PRQBOOST tokens this user holds (boost):

The reward_u for user u will be calculated as follows, where PRQ is the amount of PRQ tokens to be distributed between all LPs at this block, score_uis this user’s score, and the sum in the denominator is the sum of all users’ scores:

To calculate the amount of bonus that LP will get for providing liquidity and staking PRQBOOST for a period of time we need to sum up the rewards they get for each block. The final formula looks like this:

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Let us explain the notation:

• t stands for time (or the number of the block, which is the same in our context)
• reward(u, t₁, t₂) is the size of the bonus that user u will get for the time period from block t₁ to block t₂
• Shares_u,tis the number of liquidity tokens that user u was holding at the block t
• Boost_u,tis the number of PRQBOOST tokens that user u was holding at the block t
• PRQ_tis the number of tokens we will distribute at the block t
• I_tis the set of all users who have shares at block t

In simple words, to get the maximum reward, a liquidity provider should aim to maximize their LP share and the amount of PRQBOOST they have staked.

Besides, our technical team has come up with an elegant solution for reward distribution. The gas is pretty expensive these days. If we tried to transfer all the rewards ourselves this would require a decent amount of ETH. For some addresses, gas fee might be even bigger than the distributed reward.
Instead, we will not send all the reward tokens to the LP, but we will credit LPs with tokens in the bonus program smart contract. We will send the reward only for the 100 LPs that have collected the biggest reward. Other LPs can either withdraw the reward themselves or wait until enough reward is accumulated. LPs will be credited with the reward in each block.

How PRQBOOST will be airdropped

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PRQBOOST utility token will have a limited supply. We decided to distribute a substantial portion of PRQBOOST supply to the people who incurred losses by trading the old PRQ on Uniswap after the hard fork because we want to support our community. We hope this airdrop will help those who lost funds as well as incentivize further trading. The amount of airdropped PRQBOOST for each person will be proportional to the amount of ETH they lost. Another fraction of the supply will be distributed to all PRQ holders proportionately to the amount of PRQ they have on the day of the deployment of the PRQBOOST smart contract.

What should new liquidity providers beware of

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Though providing liquidity might be profitable and fun, we ask you not to forget about the associated risks. Before you start putting the funds in, please calculate whether the whole operation will be profitable. Transaction fees in Ethereum are very high now. Take it into account when you estimate your potential profits and losses.

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Do your own research before becoming a liquidity provider. Make sure you understand how Uniswap and our bonus program work. This is a general rule in crypto, but in such an innovative area as liquidity staking, it is especially important.

What’s next

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PRQBOOST will be tradable on Uniswap (PRQBOOST/USDT pair) starting October 30th, 2020.

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The announced bonus program is a small part of our Epoch 2 tokenomics which will be announced in its entirety before the end of October. Please stay tuned, since we have prepared amazing updates for you!