Coverage Mining Event: 09.07.2021 - 23.07.2021
This page describes Bridge Mutual's main-net launch and Coverage Mining Event.
Bridge Mutual’s Coverage Mining Event advocates a fair launch approach, where early supporters, both individuals, and projects, will get the opportunity to accumulate a significant amount of BMI tokens and become relevant members in the upcoming DAO.
The rest of this article will discuss the details of the Coverage Mining Event.
Summary — During the event:
Participants (both individual users and projects alike) will provide liquidity to their project coverage pools of choice. The higher the utilization ratio of the project coverage pool, the higher the APY for the coverage liquidity providers.
Participants provide coverage liquidity in USDT stablecoins.
Users will be able to create teams and compete against other teams for rewards. Teams will be ranked in order by the most amount of coverage they have provided.
5,500,000 BMI tokens will be distributed in emission to participants, with 450,000 BMI extra tokens being distributed to the top ten teams.
In addition to that, the top individual contributors will receive special utility NFTs which will have meaningful effects on the Bridge Mutual ecosystem and will be tradeable on the secondary market.
Only selected mainstream and partner projects’ coverage pools will be present on the platform during the event. After 14 days, any project can join the effort and take advantage of the rewards.
Registration of the teams will open on the day of the launch.
Detailed Description of the Coverage Mining Event
What is it?
Bridge Mutual’s Coverage Mining event kickstarts the creation and liquidity provision for Projects Coverage Pools.
Project Coverage Pools are the source of coverage for any given crypto project on the Bridge Mutual Platform. The bigger the Pool, the more coverage there is available to the users. The more coverage available, the higher the investors’ confidence and risk tolerance regarding the project being covered — users will naturally lock bigger portions of their assets into projects that they can get coverage for. The more they lock in various projects, the more coverage they’ll need. A positive spiral of risk — hedging. Wider availability of coverage should become a natural element of yield farming strategies and longer staking positions.
The process of creating coverage pools on Bridge Mutual will eventually be open and permission-less — everyone will be capable of creating and providing coverage liquidity for any project, and Bridge Mutual’s DAO will be responsible for assigning extra rewards distribution for those coverage liquidity providers. Supply and demand will be the primary forces determining the size and utilization ratio of the coverage pools.
During the Coverage Mining Event starting on the 9th of July, only pre-selected pools and whitelisted projects will be present on the platform. This is to ensure that rewards are distributed towards liquidity providers of established and reliable projects, which ensures a healthy start to our ecosystem.
During the event, which will last 14 days, our partner projects will provide some initial liquidity to their own pools, enabling their communities and others to buy coverage immediately. Any user is able to provide additional liquidity to these pools.
In exchange for their liquidity, coverage providers will receive yield (80% of all the premiums paid for coverage + a substantial part of the Coverage Mining Rewards + NFTs if they happen to be among the largest contributors).
Nearly 6,000,000 BMI tokens will be distributed among coverage liquidity providers throughout the event.
(Pic. 1: Coverage Mining Event, Project X positioning)
What are the rewards?
5,500,000 BMI tokens are designated to be split proportionally among all coverage providers participating in the Coverage Mining Event, and 450,000 BMI bonus tokens are given to and split among the top ten teams during the event.
Rewards are distributed in the form of BMI tokens and the final amount received depends on 3 things:
The Amount of Project Pools
Rewards are distributed to all the Project Pools currently on the platform.
The smaller the number of projects, the bigger the proportion of rewards Coverage Providers get. We anticipate roughly 15 to 20 coverage pools available at launch.
Coverage Providers at the Coverage Mining Event get much larger rewards as they are less diluted (compared to when the platform opens and the number of pools greatly increases).
2. The size of the Project Pool
The bigger a pool is compared to others currently available on the platform, the bigger the number of rewards allocated to that pool. A flat amount of tokens is distributed per block, and these are divided across all pools according to their size.
Projects and other coverage liquidity providers are economically incentivized to create pools as large as possible.
3. Utilization Ratio of the Project Pool
The rewards increase when the demand for coverage grows. The utilization ratio represents the ratio of the Coverage Pool capacity to the Policies purchased. The higher the demand, the higher the utilization ratio. The higher the ratio, the higher the rewards.
Promoting the project’s coverage pool cross-community should generate enough demand to raise the utilization ratio and further increase the % of rewards received.
Teams and NFT rewards
During the Coverage Mining Event, participants will be able to form teams via a special team referral link.
The total score of a team is the sum of all the contributions of its team members; teams compete against other teams for most coverage provided.
Funds deposited on behalf of the team cannot be requested for withdrawal until after the event is over. This means that the earliest time that the funds can be withdrawn is 8 days after the event has ended (due to the normal withdrawal cooldown).
The team contributions are subject to slashing logic. The slashing starts at 0% at the start of the event and then linearly increases up to 50% (10 minutes before the end of the event). During the last 10 minutes of the event, it goes from 50% to 99%. This mechanic is needed in order to prevent block stuffing attacks on the leaderboard.
The slashing affects ONLY the team score. For example, if a user deposits 1000 USDT while the slashing is at 30%, this means that only 700 USDT out of those will be counted towards the team which the user selected. The user is still able to withdraw all of the 1000 USDT and is eligible for (individual) rewards based on the entire 1000 USDT.
Teams and individuals that provide the largest amount of liquidity will be rewarded with a major portion of the Coverage Mining Event rewards — 5.5 million of BMI tokens, with the top ten teams alone receiving an additional 450,000 BMI.
The more capital the team has collected, the bigger the token rewards they will receive.
The tokens will be distributed proportionally to the amount of USDT each team member has provided.
The top team that contributes the most liquidity will split 150,000 tokens distributed at 30,000 tokens per month from the end of the event.
The top 2 to 5 teams will split 50,000 tokens distributed at 10,000 tokens per month.
The top 6 to 10 teams will split 20,000 tokens distributed at 4,000 tokens per month.
Based on the amount of funds collected, the 10 top teams will be rewarded with the NFTs.
The top 5 contributors for the ENTIRE event, regardless of team, will receive:
5 Platinum NFTs.
The top 10 contributors on each team will get:
1 Gold NFT.
3 Silver NFTs.
6 Bronze NFTs.
The more USDT the member of the team has committed, the higher rank and better NFT they get.
The utilities of the NFTs are as follows:
Platinum NFT — reduce the Premium price (cost of coverage) by 15%
Gold NFT — reduce the Premium price (cost of coverage) by 10%
Silver NFT — 20% boost on LP staking rewards
Bronze NFT — 10% boost on LP staking rewards
Please note, that while the NFTs are currently available on the platform, the utilities are still not active. We will enable those utilities at a later stage.
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