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How It Works

Inflation-based farming destroyed projects in 2021. Continuously mint tokens, distribute to stakers, call it yield. The problem is obvious. You’re diluting existing holders to pay new ones. Bots farm it, dump it, move on. Death by a thousand micro sells. Ponzu’s liquidity rewards come from fees. No new tokens are minted. The token contract has no mint function. The distributor sends the farm tokens. Impatience is the yield. Farming is optional. The founder enables it at craft (farmEnabled). The farm has no genesis LP — its Distributor weight starts at zero and grows as people stake. Reward sources: Trading volume grows, ETH rewards grow. More people claim early, token rewards grow. Project health directly determines farm yield.

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Staking Mechanics

  1. Get LP by providing liquidity through Ponzuki, or call zapEth on the Farm to convert ETH to staked LP in one transaction
  2. LP is an ERC-6909 balance on Ponzuki (poolId), not a separate ERC-20
  3. Each stake mints a Liquidity Card NFT embedded in the Farm
  4. Rewards accumulate proportionally to your effective stake
No top-ups. Each stake() call creates a new Liquidity Card with its own timer and rewards. Default lock is 7 days. Locks above 4 years are permanent (cannot unstake, 10× multiplier).

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zapEth

Splits your ETH, swaps half via Ponzuki, mints LP, stakes, and mints a card in one call.

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7-Day Epochs

Unstake before the card’s lock ends and you leave a time-proportional slice of LP behind. At 0 blocks the penalty is 100%. You get nothing back. Prevents flash-loan attacks where someone stakes, captures a reward distribution, and immediately unstakes. Unstaking burns your Liquidity Card. Permanent cards cannot unstake. Where does the penalized LP go? It is locked in the vault and lifts the farm’s Distributor weight, so remaining stakers earn more. It is not returned to the unstaker.

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Risks

Impermanent loss. Standard AMM risk. You hold both the project token and ETH. If the token price moves significantly in either direction, your LP position can be worth less than holding the two assets separately. At large positions ($50K+), impermanent loss can exceed farming rewards during high-volatility periods. Model both sides. Low liquidity concentration. If very little LP is staked, individual stakers capture disproportionate rewards. Feature for early stakers, but large reward batches can be captured by a small number of participants. Smart contract risk. The farm contract is immutable post-deployment. No admin can upgrade, pause, or modify it. Bugs can’t be patched. No one can rug you. Tradeoff accepted.

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Ponzu vs. Inflationary Farms

Kioke Card

Curation NFTs with two revenue streams and Koji voting credits.