> For the complete documentation index, see [llms.txt](https://docs.brila.finance/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.brila.finance/brila-dat/explanation/liquidity-strategy.md).

# Liquidity strategy

The peg can only be as stable as the liquidity behind it. A thin DAT/WHYPE pool means small trades move the price a lot, which forces frequent rebases; a deep pool absorbs flow and keeps DAT near $1. This page explains how the protocol bootstraps that depth and why it does so the way it does.

## One farm, by design: the LP incentivizer

The live deployment has one reward farm, `BrilaDATIncentivizer`:

* You provide **DAT/WHYPE liquidity** on the pool, receive the pool's LP token, and **stake the LP token** in the incentivizer.
* You earn **DAT** rewards on a **halving emission schedule**. After a period ends, the first `stake` or `getReward` interaction halves `initreward`, mints the next tranche, and starts a new period. The rollover is interaction-triggered, not an autonomous timed transaction.
* The farm must remain registered as the token's `incentivizer` to mint each new tranche. Removing that role makes a rollover revert.
* Because DAT itself rebases, the pool **scales reward accounting by the scaling factor at payout**, so `earned()` reports pre-scaling reward units while `getReward()` transfers scaled DAT fragments.

See [Provide and stake LP](/brila-dat/how-to/provide-and-stake-lp.md) for the steps.

## Why there is no single-sided "stake HYPE, earn DAT" farm

The repository still contains the generic `BrilaDATDistributionPool` implementation, which can distribute pre-funded DAT rewards for an arbitrary staking token and enforces a minimum block delay before claims. Its deployment address is zero on mainnet: it is **not a live farm**.

A single-sided HYPE/WHYPE farm was not deployed because it would emit DAT without requiring users to add DAT/WHYPE liquidity. It would therefore add reward sell pressure without directly deepening the peg pool.

The LP farm instead requires DAT/WHYPE LP tokens. Acquiring or zapping into those LP tokens creates two-sided liquidity in the same pool used by the rebaser. Emissions can still become sell pressure when claimed, and LP providers retain price and impermanent-loss risk.

## Where the treasury fits

On a positive rebase, `rebaseMintPerc` diverts part of the damped delta to the treasury path. `maxSlippageFactor` (90% by default) determines the portion used for a DAT→WHYPE pool swap; the remaining amount is retained as DAT. The swap uses existing treasury DAT first and mints any shortfall. Both the WHYPE proceeds and retained DAT go to the **rebase treasury**.

Those assets can later be used for liquidity or other treasury actions, but the contracts do not automatically add treasury-owned liquidity. Treasury custody is a trust boundary described in [Governance & security](/brila-dat/explanation/governance-and-security.md).