Pools

Liquidity Mining​

Liquidity mining incentives are a key feature of Skeleton's pools. These incentives are distributed according to each Skeleton NFT position's liquidity per seconds inside traded ticks. This means that the more active liquidity a position provides to the pool, the more incentives it will receive. This encourages users to provide more efficient liquidity to the pool, which in turn improves the overall depth of the pool.

Minimum Range​

Incentivizing liquidity on Skeleton is an important aspect of managing liquidity pools. A lot of research has been done to find the most safe, efficient, decentralized and easy-to-manage solution. The solution proposed in Uniswap's Governance was found to be the best option.

Every gauge has a minimum range for staked Skeleton NFT positions that is determined by governance. This was added to prevent a few users with narrow positions from accumulating the majority of emissions. This issue was observed with Ribbon at the end of 2021. By setting a minimum range for Skeleton positions, the pool remains stable, and the liquidity is distributed more fairly among all users.

Customized Incentives​

This solution allows each pool to have its depth customly incentivized, with pools of highly correlated assets (stable pools) having a small range (possibly as low as one tick), and loosely correlated assets (volatile pools) having a wide minimum range.

The custom incentives will depend on the correlation of the assets in the pool. This means that pools with highly correlated assets will have a smaller minimum range, while pools with loosely correlated assets will have a wider minimum range. The idea behind this approach is that the assets in a pool with a high correlation will be less likely to move away from the equilibrium point, and therefore, a smaller range is needed. On the other hand, pools with low correlation are more likely to move away from the equilibrium point, so a wider range is needed to keep them in check.

Easy to Manage​

This solution is also easy to manage by partner protocols, they only need to choose the minimum width and the pool's fee tier according to the correlation of the pool's tokens. This allows for a more efficient use of the liquidity pool's resources.

Fee Tiers​

Skeleton also allow for different fee tiers to be set for different tokens in the pool. The fee tiers of the pools can be adjusted by governance according to market conditions and the needs of the protocol.