How to Use the BSW Investment Pool? | A Step-by-Step Tutorial

13 min readDec 11, 2023

The Biswap team is actively working on implementing a new lock mechanism called BSW Investment Pool. While the innovative feature is under development, let’s delve into the UX mechanics that will take place when using the pool.

We want you to have a complete understanding of the pool’s functionality even before its release and to simplify your acquaintance with it. Our goal is to provide answers to your questions and explain the principles of operation of this new mechanism on Biswap through this article. Enjoy reading!

📍Please note that all the screenshots are an approximate representation of the final product, and the figures may differ.

BSW Investment Pool | Purpose, Benefits & Components

BSW Investment Pool is designed to create a beneficial environment for BSW holders and an enabling conditions for enhancing BSW value by reducing the token’s circulation supply. By implementing this pool, Biswap aims to transition from an inflationary model to a self-sustaining model. The functioning of the new BSW tokens lock mechanism will be a whole ecosystem of interaction: BSW Investment Pool, Real Yield Pool, Protocol Owned Liquidity, Treasury, BSW token, point representation of voting power — vBSW, and option point — oBSW.

Primary Benefits for Users

New reward types with extended utilities:
- vBSW point-representation of a voting power;
- oBSW option point that will allow users to enter the Real Yield Pool to get USDT tokens and purchase BSW with a discount.
Access to exclusive Real Yield Pool to earn USDT rewards
Superior APRs for long-term investors
Passive income in BSW tokens
4 lock periods to choose:
3, 6, 9 and 12 months.

Lock Periods & Early Withdrawal Explained

Lock Terms

You, as a user, have the opportunity to deposit BSW tokens from your wallet by choosing 4 different token lock options for different periods:

3 months
6 months
9 months
12 months

The longer the lock-in period is, the higher the APR and, therefore, the profit.

Note: users can stake BSW for multiple lock terms simultaneously.

Penalty Fee for Early Withdrawal

In case of withdrawal of funds before the end of the lock period, a penalty fee of 50% of the withdrawn deposit will be deducted. The remaining 50% and earned BSW rewards will be transferred to the user’s wallet.

📍Note: The BSW tokens received with the penalty fee will be sent to POL.

Example:

The user has staked 1000 BSW into the BSW Investment Pool for a 3-month lock term. They decide to withdraw the entire crypto deposit after 2 months. In that case, 50% (500 BSW) of the 1000 BSW will be charged as a penalty fee for the early withdrawal. The user receives a 500 BSW + earned BSW amount in their wallet.

Options after the Lock Period

After the expiration of the lock term, the accrual of rewards will be completed, and you will have several possible options:

Unstake the deposit, after which the deposit body with the accrued rewards will be sent to your wallet address.
Extend the lock term by choosing from 4 optional terms.
Add more BSW to the initial deposit and continue staking by choosing one of the 4 optional terms.
Leave staked tokens in the pool, as the lock term is over and rewards are no longer credited.

Earning BSW rewards & oBSW, vBSW points

While the BSW tokens are being staked in the BSW Investment Pool for the selected lock period, their owner earns three types of rewards.

Rewards Definition & Utilities

BSW — the native Biswap token, which allows holders to earn in the BSW Investment Pool.
vBSW — a point-representation of a user’s voting power that will be used to participate in Biswap votings;
oBSW — an option point that enables users entering the Real Yield Pool to earn USDT tokens or purchasing BSW with a discount.

📍 Note: oBSW and vBSW are not tokens. They are point-representation and an option point of BSW token, but with their own utilities. To learn more about oBSW, head over to this article.

Rewards Distribution in the BSW Investment Pool

📍This distribution of rewards is conditional and may differ after the pool release.

Distribution of BSW Rewards

BSW rewards are distributed according to the specified APR, which depends on the lock term in the reward distribution table. The APR can be changed by the team to maximize the efficiency of reward distribution. Rewards will be distributed once a day at 12:00 PM UTC.

Note: The APR will be pending (for all users) until there is at least one active deposit in the pool. We remind you that as soon as users stake in the BSW Investment Pool after the release, their deposit will be pending until the first rewards accrual, which will take place at least 24 hours later.

APR calculation for BSW Rewards

Here is the formula of calculating the APR and the example with numbers below:

APR = (1.5BSW/block * blocks/day * 365 / Total Staked Tokens) * 100

Example with numbers:

APR = (1.5 * 28 800 * 365 / 20 000 000) * 100
(15 768 000 / 20 000 000) * 100
0.7884 * 100 = 78,84% APR

For each lock option, the distribution of BSW rewards will be adjusted using a multiplier to maintain the correct APR ratio for all options.

Distribution & Accrual of oBSW

As was mentioned before, oBSW is a point option that is credited as a reward for BSW Investment Pool users. Each oBSW is backed by a real minted BSW token, which is stored on a separate contract. oBSW rewards will be distributed once a day at 12:00 PM UTC according to the share of the user’s deposit in their option in the BSW Investment Pool.

Options for using oBSW

As the BSW Investment Pool user, you have two options for using oBSW:

Use oBSW to purchase BSW for USDT with a 30% discount from the BSW Investment Pool balance;
Stake oBSW from the BSW Investment Pool balance to the Real Yield Pool to earn USDT rewards during 21 days.

Important to note: the ‘Stake oBSW’ option does not exclude the option to purchase BSW at a discount. With each day of oBSW staking in the Real Yield Pool, the discount for buying BSW will linearly decrease from 30% to 0% during the 21-day staking period. At any time of oBSW staking in the Real Yield Pool, they can be used to purchase BSW at the current discount.

Example:

When you receive oBSW rewards to the BSW Investment Pool balance, you can exchange oBSW points for real BSW tokens with a primary 30% discount. But if you decide to stake oBSW in the Real Yield Pool to earn USDT, the maximum discount will not be available for you. But you will still be able to use a certain amount of discount based on the day of staking in the pool. This is because the discount will decrease linearly after each USDT rewards crediting by 1.43%. Why exactly 1.43? Because: 30 % discount / 21 day = 1.428%. Round this sum up, and that is 1.43%.

📍It is not possible to use a part of oBSW, all functions with oBSW are performed up to the entire amount of oBSW on the balance.

Purchasing BSW for oBSW with a Discount

Here’s an explanation of how the BSW price is formed when buying at a discount. Current BSW price is taken from Oracle. Last price — the price recorded by the system, this is the price recorded at the moment of the last interaction with discount.

The discount function for oBSW in the BSW Investment Pool, Real Yield Pool is deactivated under the following condition: current BSW price is 15% higher or lower than last price. This is done to protect the discount from fraudulent activities and deliberate price manipulation. The admin address has the right to update the price, the team makes this update, making sure that there are no fraudulent activities and deliberate manipulation of the BSW price.

The discount function is active under the following conditions: The current BSW price is within +15% and -15% of the last BSW price.

Distribution & Accrual of vBSW

Here is the formula of calculating the APR and the example with numbers below:

(x3m * y3m) + (x6m * y6m) + (x9m * y9m) + (x12m * y12m) = z

X — the number of locked tokens;
Y — a multiplier, the value of which depends on the lock period;
Z — vBSW;
3m, 6m, 9m, 12m — lock periods.

Example of vBSW accrual:

The user staked 1000 BSW to the pool with a lock period of 6 months:
1000 BSW * 1 = 1000 vBSW
After that, the user staked 1000 BSW with a lock period of 9 months:
1000 BSW * 1.5 = 1500 vBSW

According to the formula above, the user receives 2500 vBSW in total immediately after the deposit is staked.

Conditions of Rewards Calculation

When you, as a user, make a deposit for one of the BSW Investment Pool lock periods:

You start receiving BSW rewards to the reward balance once a day at 12:00 PM UTC. The condition for the first deposit to be credited is that the deposit was made at least 24 hours before the crediting. This does not apply to compound or additional stake to the same lock period.
oBSW rewards are credited to the balance in proportion to the BSW received.

Example 1:
You made an initial deposit of $1000 into the BSW Investment Pool at 15:00 UTC on January 1. Your reward will be credited at 12:00 UTC on January 3. Because at 12:00 UTC on January 2, 24 hours have not yet passed since you placed your deposit.

Example 2:
You have staked $1000 in BSW in the pool and there are 10 minutes left before the crediting at 12:00 PM UTC, and then you decide to make a $500 additional stake to the same lock term or compound, and then in 10 minutes you will receive rewards based on the new deposit amount ($1500).

Also, the following criteria are taken into account when calculating the rewards:

The number of BSW tokens credited depends on the user’s tier in the pool and the multiplier for a particular lock period;
The number of oBSW credited depends on the number of BSW rewards credited to the user;
The number of oBSW and BSW accrued depends on the multiplier set by the team to adjust the rewards;
The team can change the multiplier to change the distribution of oBSW and BSW rewards;
BSW tokens that back the oBSW are allocated from the emission to a separate “oBSW supply contract”.
BSW and oBSW rewards stop accruing after the expiration of the lock period.

Types of Deposit Status in the BSW Investment Pool

There are 3 types of deposit status in BSW Investment Pool:

Pending — your deposit has been made and will become active at the next 12:00 PM UTC;
Active — your deposit is active and participates in the distribution of rewards;
Inactive — the lock period of the pool has expired. Your deposit is inactive and does not participate in the reward distribution.

The summary of your deposit tab will help you track these states:

Date of token lock — the day you made your first deposit to the pool and the beginning of the pending period;
Start date of rewards accrual — the date and time of the first reward accrual;
End date of token lock — the end of the selected staking period and the moment when your deposit becomes inactive.

Making Additional Stake, Compound, Unstake

This section describes actions that can be performed by the user in the BSW Investment Pool, such as:

Additional stake — to add more tokens to the already existing deposit;
Compound — to stake earned BSW rewards to the pool without withdrawing them;
Unstake — to get your deposited BSW tokens back to your wallet.

Additional Stake Explanation

The user chooses a lock period of 3 months and deposits 1000 BSW in the BSW Investment Pool;
After the transaction is confirmed, the deposit is locked for the selected period and starts to bring rewards;
The timer starts counting down from the moment of the stake;
After 1 month, the user makes a second deposit to the BSW Investment Pool for the same period (additional stake);
After the transaction is confirmed, the new deposit is added to the main one;
The lock period is updated and restarted for 3 months.

Note: when an additional stake is made, the lockout period will be updated.

Compound Explanation

When the ‘Compound’ button is pressed, all BSW rewards of the user are automatically added to the pool to the deposit body;
The lock timer does not change when you click on the ‘Compound’ button;
After the compounding, BSW rewards are harvested and automatically added to the deposit body;
After the compound, the amount of vBSW is recalculated relative to the new deposit amount.

An example of regular BSW rewards accrual:

A user deposits 1000 BSW in the BSW Investment Pool for a period of 3 months with an APR of 8%.
During this period, the user is credited with BSW rewards according to the APR (if it does not change):

1000 BSW * 0.08 / 365 * 90 = 19.72 BSW rewards

An example of BSW rewards accrual with compounding:

The user deposits 1000 BSW in the BSW Investment Pool for a period of 3 months with an APR of 8%;
After 30 days, the user makes a compound of the earned rewards;
BSW rewards are recalculated according to the updated number of tokens in the deposit body;
The user continues to receive BSW rewards according to the new deposit body and continues until the end of the term:

1000 BSW * 0.08 / 365 * 30 = 6,57 BSW rewards

Since the timer is not updated while compounding, but the deposit body has changed, 2 months until the end of the reward lock period will be credited according to the new deposit body:

1006.57 BSW * 0.08 / 365 *60 = 13,23 BSW rewards

As a result, the user receives a larger number of tokens using the compound function.

Harvest Explained

The mechanics of harvesting work similarly to the old Holder Pool for BSW rewards, and are not related to oBSW rewards. When you click on the harvest button, all BSW rewards are sent to your wallet and the BSW reward counter is reset to zero.

Harvest example:

The user stakes 1000 BSW in the BSW Investment Pool and has accrued BSW rewards. When the ‘Harvest’ button is pressed, all BSW rewards are sent to the user’s wallet. The number of BSW rewards displayed on the pool is updated and equals 0.

📍oBSW rewards are not related to the Harvest function.

The Introductory Tutorial

Find out more about the BSW Investment Pool process via the Biswap review.

Note, that all the screenshots are an approximate representation of the final product, and the figures may differ.

Step 1: Click the ‘Stake’ button to join the BSW Investment Pool.

📍After you staked your BSW to the pool, you can also add the number of staked BSW by pushing the ‘+’ button.

Also, at this stage, you have several options:

harvest all your earned BSW tokens;
compound your earned BSW tokens to the deposit body;
use oBSW points to get real BSW for USDT with a 30% discount (BSW purchasing with a discount is only possible with USDT). The number of oBSW points corresponds to the number of real BSW that users can buy for USDT;
stake oBSW points into the Real Yield Pool to get USDT within a particular staking period;
use vBSW as your voting power to influence the project.

📍️️Note: If a user has a few positions in the BSW Investment Pool (staked BSW for different lock terms), the vBSW from their different positions will be summed up.

Step 2: If you decide to stake oBSW into the Real Yield Pool to earn USDT, you can open several pools the USDT tokens will be accrued automatically. Note, that your discount for buying BSW will also be active here but will decrease gradually by 1.43% from the 1st to the last day of the pool. You can also track how much discount you get at the moment.

Pay attention that the oBSW balance in the BSW Investment Pool begins to burn out at a specified time gradually. It means that the allocated oBSW will burn day by day according to the daily oBSW rewards distribution. Find out more about it via the oBSW article.

Now let’s look at the situation when the lock period is over. What to do?

In this case you have several variants:

unstake the deposit and get the BSW deposit via the ‘ — ‘ (minus) button;
continue to stake choosing one of the other lock terms;
re-stake all your tokens to the same lock term via the ‘Re-stake’ button.

When the Real Yield Pools are over, you can easily grab your USDT rewards by clicking the ‘Harvest’ button.

To Sum Up

The tutorial on using BSW Investment Pool provides a straightforward and user-friendly approach for those looking to explore more DeFi opportunities. Following the step-by-step instructions, you can confidently engage in Real Yield Pool to get USDT and maximize your investments directly on the Biswap project.

Follow the Biswap news channels to keep up to date with the latest implementations on the platform!