Incentive Policies

Liquidity Incentives will be open in near future

Protocols are competing for liquidity by incentivizing contributors through the means of protocol tokens issuance. The Pawnfi Protocol will also incentivize our users through a scheduled distribution to benefit liquidity providers and users through the Protocol Ecosystem Incentives from Pawnfi Reserve.

Initial Design of Pawnfi Reserve Usage

Pawnfi Reserve will be mainly made up of two parts: $PAWN token and Lending Market Reserve. The distribution of these reserves to the ecosystem by incentive policies will be voted and can be amended by Voting Power holders. From our initial design, those incentives will notably include:

• Pawnfi Liquidity Incentives (in $PAWN)

• Pawnfi Safety Incentives (in Lending Market Reserve)

This initial design of reserve allocation through the Ecosystem Incentives and Safety Incentives is the most direct way to distribute governance power to the users while bootstrapping the liquidity and safety of the protocol.

Lending Market Reserve

In Pawnfi Lending Market, there will be the reserve factor based upon which a share of the lending protocol's interests will be reserved in a collector contract for the ecosystem. This reserve will be used to sustain the DAO, stabilize Pawnfi Lending Market and pay protocol contributors. It is made out of various assets including $PAWN.

Please see Risk Parameters for more information on reserve factor.