Sovryn has waved goodbye to the likes of centralised services that conventionally provide market-making. However, this creates a need for liquidity to facilitate trades and swaps. Without adequate liquidity, the AMM will suffer high rates of slippage and divergence from assets’ external market price. Sovryn overcomes this through liquidity providers.
Every trade generates a fee. These fees are distributed between liquidity providers as a reward, in exchange for their market-making service. The fees collected by the system and rewarded to LPs can be seen here - What are the fees?
You can participate in Liquidity Mining events. These events reward liquidity providers with SOV tokens, depending on how much liquidity they provide and for how long in a given time frame
You can provide your liquidity in the 'supply' tab in the market-making dApp page.
See the guide here.
Set the gas limit by hand to 500000 units, and gas price to 0.06 GWEI.
Yes, recommended web3 wallets like MetaMask and Nifty support hardware wallets like Trezor and Ledger directly. There is no need to keep it connected to your PC after you have finished with the interactions. Sovryn is working on interacting directly with hardware wallets, stay tuned.
The Sovryn DAMM does not require even deposits of both assets within a liquidity pool, allowing Liquidity Providers to deposit one of the assets on only one side of the pool if they choose to.
The SOV-RBTC pool will require 50/50 provision because it is a Bancor-AMM v1 pool.
Liquidity providers lock their assets in a pool to act as market-makers in return for LP tokens – a representation and receipt of their share of assets within the pool. These LP tokens are sent to your engaged rsk wallet, and are used to withdraw liquidity.
It’s important to remember that the LP tokens received are not on a 1:1 ratio with the tokens that users provide. For example, if a user provided 10 SOV to a pool, they would not receive 10 LP tokens - the amount of total LP tokens within a pool is dynamic and are not set 1:1 with either of the assets within the pool. A user can receive any amount of LP tokens depending on the pool, so if a user provided 10 SOV they may receive, for example 2 LP tokens. This doesn’t mean that the user has lost 8 SOV, it is just that LP tokens are not proportionally denominated with any asset in the pool. In this scenario, the user could redeem their 2 LP tokens and withdraw 10 SOV. The AMM records how many LP tokens it has created and given in return for liquidity. When a new user provides liquidity the AMM creates more LP tokens and gives the user the appropriate amount which would maintain accurate relative shares of the pool for both previous and new LPs.
You can add the following token addresses as a custom token in your rsk wallet, which will allow you to see your pooled asset LP token amounts:
For the DOC/BTC AMM:
For the BTC/BPRO AMM:
For the SOV / BTC AMM: (here it's just a single LP token)
You can withdraw your liquidity from the 'withdraw' tab in the market-making dApp page.
See the guide here.
You can withdraw your liquidity at any time, it will only cost the stated transaction fee amount. Be aware of impermanent loss, and how the time at which you withdraw can affect whether you are at risk of impermanent loss or not.
Within the DAMM's liquidity pools, the current balance can deviate from the staked balance between the time somebody provides liquidity and the time they wish to withdraw it. This could mean, if the current balance is lower than the staked balance at the time of withdrawal, the liquidity provider's share of the pool is actually worth less than the initial liquidity amount they provided
The staked balance indicates the total amount of tokens staked by liquidity providers, it is a record of the pool’s obligation to its LPs. The contract (or current) balance indicates the amount of tokens actually held by the contract at any time. The current balance can diverge from the staked balance due to the volatility of one of the assets in the pool
Trades generates a fee in the asset of the token converted to. For example, a trade of USDT to BTC generates a fee amount in BTC. This fee is distributed between liquidity providers as a reward, in exchange for their market-making service. An individual's share of the fees collected will be the liquidity they have provided, as a percentage of total liquidity provided in the pool
A user's share of the liquidity mining rewards will vary dependng on how much liquidity they have provided, relative to the total liquidity in the pool. Rewards are now calculated block by block. You can imagine a user's reward amount to be their share of the pool, multiplied by the per-block SOV reward amount (which is set to equal out at the event headline figure at the end of the week. For example, to put it very simply: if there were 1,000 SOV in a loot drop event and 10 blocks in a week (its actually thousands in practise), then a user would earn 1,000 SOV multiplied by their share of the pool. So if they had supplied 1% of the liquidity in the pool at the time the block was confirmed, they would earn 1,000 * 1% = 10 SOV for that block.
This feature is coming soon… it is currently in testnet - https://test.sovryn.app/liquidity
The calculation assumes that every LP holds their liquidity in the pool until the end of the month. Therefore, withdrawals before the end of the month may result in actual returns being slightly different to the predicted return.
The tokens you earn from liquidity mining can only be finalised and paid to you at the end of the mining event period. This is because your share of the pool will constantly fluctuate as people provide and withdraw liquidity. At the end of the month, your share will be calculated and "loot dropped" to a 10 month vesting contract with your wallet address as the owner.