🪙Liquidity Pool Rewards

On Beam, a liquidity provider's income is currently the trading fees earned on their liquidity positions from trading activity between those token pairs.

Soon, Beam will transition to a ve(3,3) structure and the liquidity provider will instead earn $BEAM token emissions as a reward for liquidity provision.

ve(3,3) Pools If both tokens of a liquidity pool's pair are whitelisted by the team to be staked in a reward pool, the liquidity providers of that pair will not receive trading fees, but instead receive $BEAM emissions.

veBEAM holders who vote to incentivize a particular reward pool with emissions will receive the trading fees and bribes from the liquidity pair that they voted for. This creates the incentives for veBEAM lockers to vote for the liquidity pools that produce the highest volume in trading fees. The amount of fees earned by veBEAM holders depends on the pool that they vote for. 85% of all trading fees on ve(3,3) liquidity pools are sent to its respective reward pool, and the remaining 15% go to the protocol multisig to fuel initiatives that benefit the Beam ecosystem.

Through this mechanism, the system provides veBEAM holders with the power to incentivize trading fees instead of total liquidity. The destination of $BEAM emissions is in the hands of the lockers.