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Author: Admin | 2025-04-28
A `Pool 1 LP share, 1-week` gauge would distribute rewards to users who have bonded Pool1 LP tokens for one week or longer. The amount that each user receives is in proportion to the number of their bonded tokens.A bonded LP position can be eligible for multiple gauges. Qualifications for a gauge only involve a minimum bonding time.Let’s explore with an example:The rewards earned from liquidity mining are NOT subject to unbonding. Rewards are liquid and transferable immediately. Only the principal bonded shares are subject to the unbonding period.Allocation PointsNot all pools will have incentivized gauges. In Osmosis, staked OSMO holders choose which pools to incentivize via on-chain governance proposals. To incentivize a pool, governance can assign “allocation points” to specific gauges. At the end of every daily epoch, 45% of the newly released OSMO (the portions designated for liquidity incentives) is distributed proportionally to the allocation points that each gauge has. The percent of the OSMO liquidity rewards that each gauge receives is calculated as its number of points divided by the total number of allocation points.Take, for example, a scenario in which three gauges are incentivized:Gauge #3 – 10 allocation pointsGauge #4 – 5 allocation pointsGauge #7 – 5 allocation points20 total allocation points are assigned in this scenario. At the end of the daily epochs, Gauge #3 will receive 50% (10 out of 20) of the liquidity incentives minted. Gauges #4 and #7 will receive 25% each.Governance can pass an `UpdatePoolIncentives` proposal to edit the existing allocation points of any gauge. By setting a gauge’s allocation to zero, it can remove it from the list of incentivized gauges entirely. Proposals can also set the allocation points of a new gauge. When a new gauge is added, the total number of allocation points increases, thus diluting all the existing incentivized gauges.Gauge #0 is a special gauge that sends its incentives directly to the chain community pool. Assigning allocation points to gauge #0 allows governance to save some of the current liquidity mining incentives to be spent at a later time.External IncentivesOsmosis not only allows the community to add incentives to gauges. Anyone can deposit tokens into a gauge to be distributed. This feature allows outside parties to augment Osmosis’ own liquidity incentive program.For example, there may be an ATOMFOOCOIN pool that has a one-day gauge incentivized by governance OSMO rewards. However, the Foo Foundation may also choose to
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