We are happy to introduce IMX Leveraged Farming, a 4-year liquidity mining program that will distribute IMX reward to borrowers on the Impermax protocol. Farmers will be able to leverage their farming position up to 20x, effectively multiplying their IMX reward.
IMX Leveraged Farming will be activated on the same day as TGE.
Incentivizing Leverage on LP Tokens
The Impermax protocol generates an economic incentive for liquidity providers to leverage their LP tokens by giving an IMX reward to borrowers. On Impermax the easiest way to open a large borrowing position is by leveraging LP tokens. For instance, if you have $10,000 worth of LP tokens and you enter in a 10x leveraged position on it, you will borrow $90,000 worth of tokens. You will then earn the IMX farming reward on the $90,000 even though you initially had only $10,000. This means that farming IMX should provide a very high APY, compared to other options, and the higher the leverage the higher the reward.
Benefits for Lenders
On Impermax we use a dynamic interest rate model that adjusts the interest rate for a lending pool based on borrowing demand and lending supply. As IMX farming will highly incentivize borrowing on Impermax, we should expect a large increase in borrowing demand which will result in higher interest rates and a higher reward for the lenders. Simply put, the IMX farming reward will indirectly incentivize lenders as it directly rewards borrowers.
Benefits for IMX Holders
IMX farming will strongly incentivize the protocol usage and will attract more users, more liquidity, and more investors. As the Impermax ecosystem grows we expect the IMX token value to rise. This is the first benefit for IMX holders.
The second benefit has to do with protocol profits. Impermax generates profits by taking a percentage, up to 20%, of all the interest payments that borrowers pay to lenders. As borrowing volume grows and interest rates rise (because of high borrowing demand) the protocol profits will increase exponentially. These profits may then be distributed to IMX holders through a staking mechanism.
IMX Farming Long Term Plan
We think a liquidity mining program can be a great way to bootstrap liquidity for a lending protocol during its early stages. At the same time, it shouldn’t be abused, and the protocol should have a plan to be sustainable long term even without farming.
We came up with a 4-year plan:
40M IMX will be distributed over 4 years as farming reward (40% of total supply), including a total of 2% of supply paid in the first month.
The farming reward will be decreased by 2.4% every two weeks and will reach 0 after 4 years.
IMX farming reward will decrease over the course of 4 years.
Pairs Eligible for IMX Reward
The IMX farming reward will be distributed among certain targeted pairs which will share the reward based on a parameter settable by the governance. For each pair, the reward will be then distributed to all the borrowers of that pair proportionally to the size of their borrowing position.
These are the pairs that will be initially eligible for the IMX reward from the day of token launch:
IMX/ETH: 30% share
USDT/USDC: 22% share
ETH/USDT: 8% share
ETH/USDC: 8% share
ETH/DAI: 8% share
WBTC/ETH: 8% share
DPI/ETH: 8% share
UNI/ETH: 8% share
How To Start Farming
If you’re new to Impermax you can open a new leveraged position in an eligible pair and you will instantly start receiving IMX reward which you will be able to claim at any time.
If you already have a leverage position or a borrowing position you need to manually activate IMX farming for that position. Notice that this activation is only needed for pairs that you began leveraging or borrowing before IMX farming was enabled for that pair.
Try Farming on Ropsten Testnet
We’re happy to announce that IMX farming is already in our Ropsten testnet, and you can already test it there if you’re interested in becoming an IMX farmer:
You’re invited to join our community on Telegram and if you have any questions our team will be happy to answer them. If you don’t want to miss out on IMX Leveraged Farming you can start using our application today to open a leveraged position in one of the eligible pairs and you will start receiving IMX reward from day 0.
We're developing a DeFi ecosystem that will enable investors to leverage their LP Token.