Reward Pools are the way the Cross-Chain Bridge distributes the majority of protocol incentive or bridging fees: 70% of the fees collected from bridgings in a specific token are sent to the corresponding Reward Pool. After having farmed BRIDGE tokens (step 1), the Reward Pools can be accessed by staking BRIDGE tokens (step 2).
BRIDGE holders can choose the token they would like to be rewarded in?—?as they can put their BRIDGE in any Reward Pool. As an example: If you provide USDC liquidity, you can farm BRIDGE. With BRIDGE, you can get more USDC or more USDT or any other token that has a Reward Pool.
IMPORTANT: BRIDGE tokens can only be withdrawn from a Reward Pool by burning 30% of the deposited BRIDGE tokens. This feature is necessary to incentivize long-term/infinite stakings and disincentivize big holders from permanently jumping from pool to pool which would lead to less rewards for the smaller holders. The Reward Pools should be regarded as a way to earn regular passive income from protocol incentive or bridging fees, long-term.
rewards per user will be determined by a) the collected protocol incentive or bridging fees, respectively (and thus the bridging volume in the asset of the Reward Pool), and b) the share of the pool?—?which is:
Reward Pool Share = User Amount of BRIDGE Tokens in Pool / Total Amount of BRIDGE Tokens in Pool
The APR of Reward Pools shown on the website is an estimate and average calculated with the current staking amount and bridgings from the last 7 days (except for the first days after the launch when no 7-day history is available. In this case, the longest available period between 24 hours and 7 days is taken.). Actual Rewards depend on the amount staked as well as the size & amount of bridgings that will happen in the future. The higher the amount staked and the size & amount of bridgings, the higher the collected protocol incentive or bridging fees and the higher the rewards.
Due to the inflationary nature of the BRIDGE token and assuming more users entering the Reward Pools, users will have to deposit more BRIDGE tokens over time if they want to keep their Pool Share constant (but protocol incentive or bridging fees should also increase over time so that users can earn the same rewards with a lower Reward Pool share).
This design is intentional due to the no impermanent loss nature of Liquidity Provision in the Cross-Chain Bridge.
Every new asset that gets self-listed (or whitelisted by the team) automatically generates a Reward Pool.
More technical details can be found in the Smart Contracts section of this GitBook.
