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Honeyswap Liquidity
When you create your Garden, you will need to provide the initial liquidity for your new token on Honeyswap. The minimum liquidity requirement is $100 of HNY paired with $100 of your new GDN token.
The logic behind this requirement is as follows:
- It acts as a spam filter. Since we are putting in time and effort to help every Garden creator set up and manage a Garden, we want to make sure Garden creators are somewhat serious / at least have some skin in the game.
- If you are using Gardens to create a token, you will need some initial liquidity somewhere to allow for both trading and price discovery. Providing it on Honeyswap helps strengthen the relationship between your community and ours (more on this below).
- If you intend to recalibrate your proposal and challenge deposit amounts (which are paid for in your Garden's token) relative to a specific dollar amount, your Garden uses Honeyswap as an oracle. Without at least some liquidity on Honeyswap, accurate recalibration is not possible.
- The only case in which this requirement isn't strictly needed for your Garden to function properly is if you are importing your own token that already has liquidity somewhere else, and you don't wish to recalibrate your proposal and challenge deposit amounts according to a set dollar amount. In this case, you can think of it as a small gesture of solidarity that serves to align both our communities.
For some context, Honeyswap is a Uniswap v2 fork managed by the 1hive community that uses part of the protocol fee to buy back HNY and return it to the common pool.
All pools have a 0.3% swap fee, of which 5/6 goes directly to Liquidity Providers involved in the swap. The remaining 1/6 is split evenly between buybacks of HNY and an incentive token local to the chain on which the swap has happened.
These HNY buybacks are returned to the 1hive common pool, where they are used to fund more public goods for the 1hive community. This means there's a very real sense in which providing liquidity on Honeyswap helps contribute to 1hive's sustainability, which in turn allows us to continue funding public goods like Gardens.
N.B. We are committed to allowing anyone who is serious about creating a Garden to do so, regardless of financial ability. If this requirement is a genuine financial blocker to you starting a Garden, please do get in touch with us - the first step is to create a forum post on the 1hive discourse explaining why you wish to create a Garden, and why this is a blocker for you.
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