CardWallet’s Liquidity Mining Launched — A Step-by-Step Tutorial
CardWallet is launching its Liquidity mining campaign! This will allow CardWallet token owners to participate in the operation of the liquidity pool which allows users to exchange USDC for CardWallet tokens and vice versa.
This pool participation will grant participants trading fees that the liquidity pool incurs to users exchanging tokens via the same liquidity pool.
Pool participants are called “Liquidity Providers”(LPs) and whether LPs receive all or a portion of the trading fees incurred by the pool to traders depends on which platform the pool operates on and what type of a liquidity pool it is.
In CardWallet’s liquidity pool case — all trading fees are relayed to the LPs. CardWallet liquidity pool’s LPs receive, as a group — 0.3 % from each trade executed via the liquidity pool on UniSwap. This percentage is further divided among LPs depending on a weighted distribution of the amount of liquidity provided.
And this is just the tip of the DeFi options iceberg that CardWallet will offer.
Before we dive deeper into the CardWallet liquidity mining campaign, let us first cover the basics for those less acquainted.
What Is Liquidity Mining?
The concept of liquidity mining is a decentralized finance mechanism, which means it functions independently of anyone’s authority, on the blockchain. Precisely because of its decentralized nature users utilizing this mechanism do not need to fear that anyone else’s dishonest behaviour will lead to the loss of their tokens.
The mechanism is simple — a user deposits their tokens into a liquidity pool and then these tokens are used by the liquidity pool to execute trades between traders. During the process of liquidity pool’s execution of trades, fees are accrued and are distributed to both the liquidity providers and the platform on which this liquidity pool is operating on. There are cases wherein the liquidity pool only relays trading fees to the LPs and not the platform, as it is the case with the CardWallet’s liquidity pool.
There is however a phenomenon called impermanent loss which potential Liquidity Providers (LPs) need to consider before participating in the liquidity mining campaign.
A Deeper Dive Into CardWallet Liquidity Mining Campaign
As stated previously, Cardwallet liquidity pool LPs will receive 0.3 % from each trade — as a group, which will then be divided among LPs according to the ratio of liquidity they provided for the pool.
To offset the phenomenon called Impermanent Loss, CardWallet has set aside a significant portion of its total supply to distribute it to CardWallet’s liquidity pool providers!
This is why CardWallet liquidity pool providers can expect triple digit APY until October 5th, while these extra rewards for liquidity mining are distributed. To check the exact APY at the current moment visit https://cardwallet.fi/liquidity-mining
CardWallet has set aside 290,000 extra liquidity mining rewards that will be distributed on top of existing rewards issued by the liquidity pool.
The CardWallet team has decided to do so to ensure that LPs which participate in the CardWallet Ecosystem via liquidity mining are adequately rewarded.
The liquidity pool which offers liquidity mining is a USDC-CW pool which means that an LP will have to deposit both USDC and CW to receive trading fees from traders and additional liquidity mining rewards.
Step-by-Step Tutorial On How To Start Liquidity Mining
Check our video tutorial, that aims to help those who have never enjoyed the benefits of Liquidity Mining to get started.
Happy Mining!
To find out more, visit CardWallet at:
