Introducing the NOIA Liquidity Program on Uniswap
Over the past year, it became evident that DEX trading will only grow in relevance and market share. That’s why we kick-started NOIA trading on Uniswap by adding $50k in liquidity from our side.
Uniswap Liquidity Program updated on: Wednesday, April 23, 2022.
NOIA Liquidity Program details
Expiration
None, however we do reserve the right to terminate the program at any time.
Reward size
1.65 NOIA tokens per 1 Ethereum block, maintaining the right to change the reward size.
How does it work?
Whenever an Ethereum block is minted, 1.65 NOIA tokens will be given out to those who provide liquidity on Uniswap. There is no minimum or maximum amount required. Every participant will be rewarded proportionally.
Usually, there are around 7,150 Ethereum blocks in one day, which effectively means that Liquidity Providers (LPs) will divide 11,780 NOIA tokens between themselves based on how much everyone contributes.
You can add and remove liquidity freely as our system will track the liquidity pool at all times, and every time there is a change of distribution in the pool we will readjust the reward proportions for that period.
Your expected return
While it’s impossible to predict, the logic is straightforward. Since the reward amount in tokens is constant, every participant’s return will be determined by the overall liquidity pool size.
In the beginning, when fewer people participate and the liquidity pool is small, the rewards might be substantial. As the pool size increases, the rewards will decrease. Those no longer satisfied with their return will leave, in turn increasing the reward for those that stay.
This process will continue until an equilibrium is reached and the market determines the optimal return for providing liquidity.
Example
- You provide $10,000 worth of liquidity for a month while the total liquidity pool is $1,000,000.
- Your share of provided liquidity equals 1%, therefore you will receive 1% of all token rewards distributed during the month.
- Total reward amount for the month is amount of days times 11,780 NOIA tokens (approximate daily reward) which equals approximately 353,400 NOIA tokens.
- Your share of 1% will result in approximately 3,530 NOIA tokens per month.
Reward distribution
Rewards will be distributed once every 5 to 10 days depending on the gas price.
Because of the high gas price, we have determined a threshold to receive the rewards. Your NOIA token rewards will only be sent to you once it reaches 300 NOIA tokens or more. Small transactions will not be sent out. Instead, they will be added to next period’s rewards until it meets the threshold requirement.
What is Uniswap?
Uniswap is one of the most highly regarded AMMs (Automated Market Maker) in the crypto scene. It is a decentralized exchange where you don’t have to sign up and can directly trade from your wallet. You no longer need to trust any 3rd party such as an exchange to safeguard your crypto assets.
Uniswap allows you to contribute to liquidity pools for any ERC20 token, and gain commissions for doing so. We highly recommend you go through Uniswap Documentation if you’re not sufficiently familiar with it.
How To Provide Liquidity on Uniswap
1. Find the NOIA/ETH pool on Uniswap by searching for the NOIA token contract address:
0xa8c8CfB141A3bB59FEA1E2ea6B79b5ECBCD7b6ca
2. Connect to Uniswap interface using your wallet (e.g. Metamask)
3. Choose the amount of ETH and NOIA you want to provide to the pool
4. Click Supply and perform the transaction
Links:
NOIA/ETH Liquidity pool on Uniswap
Risk warning
While Uniswap is generally safe to use, you must understand how it works. The protocol itself has been used for quite some time and billions of dollars worth of assets are locked in it.
We highly recommend you familiarize yourself with Uniswap before performing any actions on it. A couple of resources we suggest are Binance Academy and Decrypt to get you started.
Transactions fees
High transaction fees can add up quickly and make it difficult to operate with small amounts. Make sure you take that into consideration when calculating your potential returns.
Impermanent loss
Impermanent loss is the difference between holding tokens on Uniswap and holding them in your wallet. It occurs when the price of tokens locked on Uniswap diverge in any direction. The more divergence, the greater the impermanent loss.
It happens because of how AMMs work — they maintain the same value ratio between the two assets (e.g. NOIA and ETH). If ETH increases in value, your position will readjust to maintain the ratio — if you withdraw your position, you’ll get a higher amount of NOIA tokens and lower amount of ETH.
Impermanent loss significance is determined by the volatility of either of the two (or both) assets, so it is something to keep in mind.
Impermanent loss might be offset by the trading fees that liquidity providers are eligible for as well as any additional incentives such as the NOIA Liquidity Program itself.
A more detailed overview of impermanent loss can be found here.
Have any questions?
Always do your own research before participating in anything like this. Our community management team and fellow Syntropy community members can help if you have any questions. Head to our Telegram group for that.
