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Liquidity Mining and Boosting
(The following liquidity mining docs are for the Phase 1 product. Liquidity mining for Phase 2 will be updated before launch)
Hexagon Finance applies an innovative liquidity mining and boosting mechanism, to incentivize users for contributing liquidity in the pools. The liquidity mining programs are flexible and target high priority pools with different weights in the reward allocation. FLAKE stakers can enjoy some boosted mining rewards from designated boosting pools.

# Liquidity Mining

Liquidity contributors in Hexagon Finance's liquidity pools are rewarded with FLAKE tokens. Initially, the whitelisted liquidity pools eligible for liquidity mining are decided by the team.
Liquidity providers will be transferred with Liquidity Provider Tokens (LP tokens), once providing liquidity. LP tokens are used to track individual contributions to the overall liquidity pool, as LP tokens held correspond proportionally to the share of liquidity in the overall pool.
Once, one stakes the LP tokens in the mining contract, he/she will automatically enjoy FLAKE rewards pro rata.
The Hexagon Finance liquidity mining contracts are designed to be flexible enough to have multiple mining rewards. Therefore, liquidity providers may enjoy rewards in multiple tokens at the same time.
One may further boost the FLAKE rewards with staked FLAKE, thanks to the mining boosting mechanism.

# Liquidity Mining Tiers

Hexagon Liquidity mining incentives operate in 3 tiers.
Tier 1 is a group of the core liquidity pools. It will have a 50% allocation of the total FLAKE incentives. The pools and emissions are decided by the liquidity mining committee.
Tier 2 is a group of liquidity pools, whose incentives and allocations are decided by the community governance. It will have a 40% allocation of the total FLAKE incentives. The adjustment of the incentives for the liquidity pools in Tier 2 is adjustable on a periodical basis (initially bi-weekly), based on the governance decisions. Qualified FLAKE holders (veFLAKE and contributors in the FLAKE liquidity pool) may also decide the additions to the liquidity pools in the Tier 2 group.
Tier 3 is a group of liquidity pools for the newly listed projects in Hexagon. It will have a 10% allocation of the total FLAKE incentives. New projects may enjoy incentives of FLAKE tokens, for a predetermined period of time (normally 2 weeks) on Hexagon Finance, to bootstrap the initial liquidity. FLAKE holders may decide whether to keep the liquidity pool in Tier 2 when the predetermined period of time expires.

# What is the mining boosting mechanism?

Hexagon's Mining Boosting Mechanism is a brand-new mechanism that allows FLAKE stakers to earn boosted mining rewards in FLAKE when providing liquidity to the designated pools in Hexagon Finance.
After staking FLAKE in the FLAKE single-coin staking contract, and depositing the veFLAKE (vested FLAKE) into the whitelisted mining pool, liquidity providers will be able to boost their mining APR.
veFLAKE can be converted back to FLAKE at an increasing exchange rate, based on the reward rate from the buyback activities with protocol fees. When the function of converting veFLAKE to FLAKE is triggered, there is a 90-day waiting period, which means that one needs to wait for 90 days to claim his/her equivalent FLAKE tokens.
veFLAKE is auto-compounding in FLAKE, even when boosting in the mining pool. But keep in mind that the veFLAKE : FLAKE exchange rate is ever-increasing. Therefore, it is recommended to get some FLAKE and stake in the pool as early as possible.

# How does the Mining Boosting Mechanism work?

FLAKE stakers will enjoy a boosted APR based on the veFLAKE deposited into the mining contract. The boosting effect will depend on how much veFLAKE is deposited into the mining pool and will be calculated according to the formula below:
Basic Rewards are the rewards without considering the veFLAKE boosting factors, according to the share in the mining pools. Liquidity contributors in these pools will get their basic mining rewards pro rata.
The veFLAKE will give the miners a direct boosting effect on the FLAKE emissions.
Boosted Rewards = Basic Rewards * Boosting Factor
Boosted APR = Basic APR * Boosting Factor
The minimum requirement for boosting the rewards is 500 veFLAKE. If you stake less than 500 veFLAKE into the boosting contract, you will not have any boosting effect and the APR will remain the same. In other words, the Boosting Factor will be 1.
Users who deposit some veFLAKE in the mining contract will get an immediate boost. For example, if the basic APR is 50%, and the boosting factor is 1.03, then the boosted APR will be 50%*1.03 = 51.50%.
The more veFLAKE one deposits, the higher the boosting effect will be.

## The boosting algorithm

The Boosting Factor is decided by the following algorithm, where N is the veFLAKE staked in the boosting contract, provided the staked veFLAKE is higher than 500.
Note that veFLAKE has 18 decimals, so the N is recorded as 1*10^18. For example, if you staked 2000 veFLAKE, then N = 2000 * 10^18
$Boosting Factor = \log_{5}{(N+500000*10^{18})} -32.90$
Boosting Factor Algorithm
• In order to have an effectived boosting, you must stake at least 500 veFLAKE.
• The more veFLAKE staked, the higher Boosting Factor one will get.
• The speed of boosting is declining, with more veFLAKE staked. In other words, the slope of the boosting curve is decreasing.
• The boosting factor will not be capped.

# Which pool will benefit from the boosting effect?

Similarly to the pools whitelisted for FLAKE rewards, those that are eligible for mining boosting rewards will have to be whitelisted.
The whitelisted pools that are benefited from the boosting effect will be selected by the Hexagon team initially after deployment. But it will be changeable later through community governance.