The idea is to allow projects to allocate a certain amount of funds as ‘Boost’ collateral for their LPs on xExchange.
This Boost collateral, will be used over a vesting period, so that it boosts the APR of their Liquidity Pool on xExchange.
Let’s go through the logic with an example.
A project provides an additional collateral of 1000 EGLD. The vesting period is 20 weeks. This means that an automated smart contract composed into xExchange (coindrip?), would consume the collateral on a weekly basis (1000/20 = 50 EGLD) and would purchase MEX in the open market to distribute it as part of the farm APR during the reward epoch.
At current rates, 50 EGLD would allow a boost of 330 Million MEX to be purchased in the open market and distributed weekly as a boost to the LP of the project as part of liquidity bootstrapping. As part of the process, the MEX would become fully energised and distributed to the LPs proportional to their contribution % in the pool
To ensure that EGLD pledged isn’t idle, the contract would ensure that EGLD is staked, It would handle the weekly ‘phased’ unstaking, always ensuring there’s an adequate amount of free EGLD at the time of reward distribution, so that it can be used to purchase XMEX and provide boosted rewards to the LP
Projects that have decided to pledge collateral for open market rewards boosting could receive more prominent visibility in xExchange, proportinate to the size of their LP and the size of their collateral.
