In a real world economy, market liquidity is found in currency pairs where buyers and sellers are matched once said parties agree on the price for the amount they intend to trade. To act as a market maker in the real world economy will require substantial capital to provide liquidity to the market. Still, with the rise of decentralised cryptocurrency, anyone can be a liquidity provider by staking in the liquidity pool and receiving the transaction fee from the trader according to your contribution to the liquidity pool.
Liquidity Staking Mechanism
With our Denarii coin, users may take part in the staking system which is also serves as the liquidity staking pool. Here, stakers offer different cryptocurrency pairs, in this case, DEN (Denarii coin) and BUSD to the liquidity pools, for the purpose of trading exchange.
The liquidity staking pool will function similar to centralised exchanges by giving a form of incentive back to stakers from the trader fee. In our liquidity pool, stakers will receive earnings from the Morpheus staking pool in addition to a small share of the transaction fee from the trader. In short, the DEN/BUSD staking pool will give DEN as interest to stakers depending on the trading volume, duration of staking, and the token steam flow from the staking pool of Morpheus.
This Liquidity Pool will provide liquidity for users to trade the DEN/BUSD pair, meaning that this pool will be used as a line of credit to add immediate liquidity across the exchange market between DEN and BUSD. This interest comes in form of the transaction fee from swapping during the exchange and interest from the staking pool of the Morpheus Free capture model.
Stakers will earn DEN (Denarii coin) rewards for staking DEN and BUSD. DEN rewards will be distributed continuously according to each staker’s portion of the total BUSD in the liquidity pool plus the passive revenue of the staking pool from the Morpheus Free capture model depending on the duration of the staking.
The duration of the staking period will be varied from time to time depending on the volume of trade and the staking pool’s token flow from the Morpheus Free capture model.
In short, the longer the staking period is, the more interest from the staking pool of Morpheus will be allocated to stakers and the higher portion in the liquidity pool that is staked, the higher the transaction fee received will be.