Protocol Update: Improving Trade Routing & Tightening Emissions to Maximize Tokenholder Value

3 min readMay 25, 2022

In the continual pursuit of enhancing the protocol and ensure its sustainability, StellaSwap will retire several ‘unproductive’ farms in order to tighten emissions and maximize tokenholder value. Additionally, the retirement of several farms will also improve the trade routes on StellaSwap, ensuring that users will access the best prices with limited slippage, which refers to the difference between the expected price of a trade and the price at which the trade is executed.

Farm Retirements to Reduce Daily STELLA Emissions for a Stronger Tokenomics

In order to boostrap liquidity and attract capital towards StellaSwap, incentivizing stakers to provide liquidity has been a norm in the DeFi space. In return for staking into StellaSwap, liquidity providers are rewarded with daily emissions of STELLA.

The higher the emission of STELLA, the greater the amount of STELLA in circulation, which may result in greater selling pressure. Although a greater TVL is good for the protocol, it dilutes tokenholder value. The most optimal emission strategy would be to continue to incentivize productive farms, which refers to farms with high trading volume.

After extensive analysis on StellaSwap, we have identified several unproductive farms that do not have sufficient trading volume. Continuing daily emissions of STELLA for unproductive farms is a bad idea since it erodes the value for other tokenholders.

Farms Scheduled to be Retired

We have shortlisted the following farms to be retired, and their corresponding timeline;

⭐️BUSD-ceUSDT (Celer) | Expires on May 25, 13:15 PM UTC

⭐️ceWBTC-ceUSDT (Celer)| Expires on May 31, 16:00PM UTC

⭐️STELLA-USDC | Expires on May 31, 16:00PM UTC

Retirement of Celer Assets Due to Low Trading Activity

Celer farms will be retired since there is little trading volume for Celer assets. This is expected, since the bulk of trading occurs on Multichain and Nomad assets. In order to simplify the user experience and foster ecosystem standardization, we have decided to focus on Nomad assets.

Retirement of STELLA-USDC Farm to Improve Trade Routing Efficiency

There are currently 2 STELLA farms, STELLA-GLMR & STELLA-USDC. After much analysis and modelling, we found that it will be much more efficient to have a single STELLA farm. This means that the primary trading pair for STELLA would be GLMR, and we aim to focus our efforts to build TVL and liquidity on that single farm. Nearing the launch of our basepool and metapool (which will include a GLMR metapool), pairing with Moonbeam’s native token would be a more logical choice for enhancing trade routing. A more efficient trade routing results in lesser slippage for users, which is always an inherent cost in trading.

About StellaSwap

StellaSwap is the first and leading Moonbeam DEX that offers an integrated gateway to the DeFi world. Users can swap, earn, yield farm, bridge assets, explore new projects and engage in NFT trading all from a single unified platform. StellaSwap’s products are structured in such a way that facilitates decentralized governance of STELLA holders, while continuing to innovate on the collective foundations by design.