The platform is both community-owned and community-run.
Instead of using an order book, FarSwap utilizes automated market-making (AMM). In this model, liquidity providers add funds to the liquidity pool.
FarSwap has a unique native currency, FAR, which is issued to the liquidity providers on the FarSwap decentralized exchange. It has two functions. First, it entitles holders to governance rights hence they can participate in decision-making. Second, the coin entitles the holders to a portion of the fees paid to the protocol. In the FarSwap ecosystem, the FAR holders “own” the protocol.
Community governance characterizes the decentralized finance (DeFi). The growth of liquidity mining (yield farming) as an acceptable method of token distribution in DeFi has led to many token launches. Yield farming levels the playing ground for everyone involved including those with no premines, or little to no founder allocation. It also ensures equal distribution of tokens based on the number of funds supplied.
The tokens distributed through liquidity incentives enable the users to participate in the governance role. Anyone with FAR tokens can Submit FarSwap an improvement proposal, which then the members can vote on with their tokens. The proposals may involve minor or even major changes to the protocol. Unlike the traditional teams such as Uniswap, FarSwap’s development is in the hands of the FAR token holders. Additionally, FAR holders get a portion of the fees that the traders pay into the protocol. FarSwap offers a strong community, which is a powerful asset for any token project, especially a DeFi protocol.