Boost Your Earnings With Equilibrium’s EQD/USDC Stableswap Pool
As one of the most popular DeFi products, Automated Market Maker (AMM) pools have gained a reputation for allowing cryptocurrency holders to exchange their assets and earn rewards through liquidity provision. For traders looking to trade stablecoins, Stableswap pools present a type of AMM pool designed just for that. In this article, we will delve into the advantages of Stableswap pools over traditional AMM pools and guide you through the steps to develop a capital-efficient DeFi strategy using Equilibrium.
A Comprehensible Overview of Stableswap pools
Stableswap pools operate on the same principles as traditional AMM pools, with liquidity providers (LPs) depositing equal values of two or more assets. However, Stableswap pools use a different mathematical algorithm to calculate the price of stablecoins. Instead of using a constant product formula, they use an algorithm that optimizes stability. The algorithm makes stablecoin prices more predictable and less susceptible to large price swings, resulting in lower slippage and impermanent loss.
Stableswap Pool Advantages over Traditional AMM Pools
EQD/USDC holders will benefit from the Stableswap option provided on Equilibrium. Stableswap pools have numerous advantages for users seeking to grow their crypto asset portfolio.
- They ensure low slippage when trading stablecoins, allowing traders to get in and out of positions without losing great value.
- The predictable stablecoin price in Stableswap pools reduces the risk of large price swings.
- Optimized stability algorithms in Stableswap pools ensure LPs are less susceptible to impermanent loss.
- Stableswap pools offer a lower-risk method of trading stablecoins, as LPs provide liquidity without worrying about asset volatility.
To create a capital-efficient DeFi strategy using Stableswap pools on Equilibrium, follow these simple steps:
- Deposit USDC into Equilibrium.
- Mint EQD stablecoin using USDC as collateral, achieving high capital efficiency.
- Deposit EQD and USDC into the Stableswap pool to earn up to 49% APR.
- Deposit LP tokens into the Insurance pool to earn up to 73.5% APR.
- Boost your APRs by staking EQ tokens and taking advantage of the Blast Bonus.
USDC holders profit from the above strategy as it leverages the high capital efficiency of minting EQD stablecoin using USDC as collateral without requiring additional swaps. Furthermore, LP token holders can use their assets to earn attractive rewards in the Insurance pool. By staking EQ tokens and utilizing the Blast Bonus, users will further boost their APRs for improved yields.
Improved Yields and Increased Crypto Rewards
Stableswap pools are an excellent way to trade stablecoins with low risk and high efficiency. With Equilibrium’s Stableswap pools, you can create a capital-efficient DeFi strategy that maximizes your returns. By understanding Stableswap pool benefits over traditional AMM pools and following the steps outlined in this article, you can start earning rewards!
Visit Equilibrium and explore our DeFi products to find a strategy that suits you.
About Equilibrium
Equilibrium is a one-stop DeFi platform on Polkadot that allows for high leverage in trading and borrowing digital assets. It combines a full-fledged money market with an orderbook-based DEX. EQ is the native utility token that is used for communal governance of Equilibrium. Dollar-pegged EQD is Equilibrium’s native decentralized stablecoin, collateralized by a weighted basket of assets and used as a universal unit of value within the DeFi ecosystem. eqDOT is a liquid DOT staking wrapper that allows users to participate in DeFi on Equilibrium while earning DOT staking yield.
Join Equilibrium on Discord, News Channel, Twitter, Medium, Website, GitHub
