# LP incentives

### Distribution structure

The distribution of TETU through emissions will last for 4 years and during that emissions period the LP vaults will be incentivized.&#x20;

This distribution of emissions rewards constantly takes place through the automatic rewards rebalancing system, in this system reward allocation is performed automatically daily according to the KPI of each vault, so if the profitability of a vault decreases, the TETU rewards distributed to the vault will decrease accordingly.

According to Tetu [Tokenomics ](https://docs.tetu.io/tetu-io/tokenomics)70% of TETU emissions will be distributed to users through Yield Farming. As previously stated, it will take 4 years for the entire TETU supply to be fully minted.

### Automatic Rewards Rebalancing System

The behavior of the automatic rewards rebalancing system is influenced by rewards of external projects, money deposited in the vault, and vault performance. If the farming performance of a project's target strategy is negatively affected there will be an automatic economic inclination to reduce the rewards allocated to it. The TETU buyback capacity of each vault also influences the xTETU distribution so the more TETU the vault is able to buyback, the more rewards from emissions will be allocated to the vault.&#x20;

There is an automatic economic inclination to provide greater incentives to vaults with a higher TETU buyback performance and reduce the xTETU distribution allocation for vaults that had poor TETU buyback performance. Refueling of rewards happens daily and doHardWork calls add some rewards as well.

### Manual Adjustments

It is possible to make manual adjustments in the automatic rewards rebalancing system. This function is useful to prevent a self reinforced unbalance.

### TETU Liquidity Incentives

The liquidity level of TETU in the market also suggests an amount of xTETU rewards to be allocated to TETU LP so that there is sufficient liquidity for TETU trading. Liquidity is important for investors to be able to build a TETU position effectively without having a price impact too high and losing money on slippage costs. Liquidity is also important for TETU Yield Farming profits to be realized.

### Resources

Liquidity Providing article on [Medium](https://medium.com/@tetu.finance/interacting-with-tetu-7c01e5d6e575).

Auto Compound article on [Medium](https://medium.com/@tetu.finance/auto-compound-d259d9e2721e).

