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How to Series — How to get iDOL

In this article, we’ll go over how you can acquire iDOL using the Lien app.

The iDOL stable coin is the base currency on FairSwap. You can use iDOL to purchase LBTs, Lien tokens, and also use them to unlock SBTs.

In addition, all bidding activity during SBT auctions are done with iDOL.

You will also need iDOL to participate in certain Initial FairSwap Listings.

What is iDOL

iDOL is a stable coin backed by ETH derivatives

iDOL is an ERC20 token that is programmed to be stable against the US dollar. iDOL is purely backed by ETH derivatives and does not use centralized assets as collateral Stabilization of the iDOL price is achieved through market mechanisms acting on arbitrage opportunities. The Lien protocol is governance-free and therefore iDOL tokens are censorship resistant.

https://lien.finance/idol

How to get iDOL using the Lien app

Getting iDOL using the Lien app is very easy!

There are two basic ways to get iDOL using the app; Minting and Trading.

When you Mint, you create a new iDOL from ETH, similar to creating DAI from depositing ETH to Maker.

When you Trade, you purchase iDOL from the market, similar to swapping ETH for DAI on Uniswap.

There are tradeoffs between both methods so let’s look at Minting first because it is unique to Lien.

Then we’ll look at Trade, which should be a familiar exercise for most people.

Then finally, we’ll wrap up by going over which method you should choose based on your situation.

How to mint iDOL

Step 1 Connect wallet and go to Mint screen

Go to https://app.lien.finance/ and connect your wallet.

After your wallet is connected, click Mint in the top menu bar.

That will take you to the Mint iDOL screen.

Step 2 Enter amount to mint

Enter the amount of ETH that you want to convert to iDOL and click Mint.

Some things to note here.

When you Mint iDOL, the following transactions occur in the background:

  1. Tranche (split) ETH into SBT and LBT
  2. Mint iDOL from SBT
  3. Swap LBT on FairSwap for iDOL

You can end up with more or less iDOL than the value of the ETH you are converting based on the price of LBT on FairSwap.

Pay attention to the LBT mispricing indicator which shows the discrepancy between the theoretical LBT price based on the Black Scholes Model, and the actual price on FairSwap.

If the pricing is disadvantageous for you, consider other options such as trading ETH for iDOL which we will cover later, and also the Manual Tranche function if you really want to get creative.

It is also important to note that you will not receive 100% of the iDOL that is being minted in the transaction right away.

Approximately 5% of the transaction amount will be locked until the maturity date of the SBT that is being created in the transaction.

This is part of the stabilization mechanism of the Lien protocol.

The amount of locked iDOL that is returned to you will depend on the results of the auction on that date.

All of the important information can be reviewed in the confirmation pop up screen.

Step 3 Confirm transaction with wallet

After you click the Confirm button, your wallet will ask you to confirm the transaction.

Your wallet will ask you to confirm several times depending on the steps required for the transaction.

Approve settings can be changed in the dApp settings which you can access by clicking the gear icon.

You can see the progress of your transaction in the notification area.

Step 4 That’s it!

Once your transaction is successfully confirmed on the blockchain, your balance will refresh.

It might take a while for the iDOL from the LBT swap to arrive in your wallet but this is normal. In the background, the LBT that was minted in your transaction is being swapped for iDOL on FairSwap. This might take a while depending on the trending activity on FairSwap. You can check that the transaction is being executed by using block explorers such as Etherscan.

The iDOL that got pooled can be redeemed from the main screen of the app when the maturity date of the SBT generated in the transaction arrives.

How to trade iDOL

Step 1 Connect wallet and go to Trade screen

Go to https://app.lien.finance/ and connect your wallet.

After your wallet is connected, click Trade in the top menu bar.

Once you are in the Trade screen, click on the Select Market pull down and select the iDOL-ETH market under Token Markets.

Step 2 Enter amount to trade

Click on the arrow to reverse the direction of the tokens and enter the amount of ETH that you want to convert to iDOL (or the amount of iDOL that you want to acquire) and click Swap Now.

Some things to note here.

Pay attention to the slippage information.

Depending on the size of the order and the liquidity being provided to the liquidity pool at that time, slippage could be significant.

Slippage is set to a default of 5% and can be decreased to 0.1%.

It is important to note that your order exceeding the slippage limit will not be settled.
You will be refunded for the portion of the order that did not get settled.

Step 3 Confirm transaction with wallet

After you click the Confirm button, your wallet will ask you to confirm the transaction.

Your wallet will ask you to confirm several times depending on the steps required for the transaction.

Approve settings can be changed in the dApp settings which you can access by clicking the gear icon.

You can see the progress of your transaction in the notification area.

Step 4 That’s it!

Once your transaction is successfully confirmed on the blockchain, your balance will refresh.

Should I Mint or should I Trade?

This will depend on the size of your order, liquidity and pricing on FairSwap, and your preference.

Theoretically, you should be able to get the most iDOL for your ETH if you Mint.

The downside is that approximately 5% of the transaction amount will be locked until the maturity date of the SBT generated in the transaction.

If you are in a hurry to use iDOL right away, then you might want to consider Trade.

The downside is that depending on the size of your order, slippage might be significant.

The market could also be momentarily mispricing iDOL and causing a divergence between the theoretical price of iDOL and its market value.

This of course leads to interesting arbitrage opportunities, but that would be a topic for another article, another day.

Summary

Mint and Trade are easy and quick ways of getting your hands on iDOL.

But there is so much more that you can do with Lien.

By using the Manual Tranche function of the Lien app, you can convert ETH into a combination of iDOL and LBT.

By converting ETH into iDOL and LBT, you gain access to stable coins while still maintaining exposure to the upside of ETH!

This is also the safest method of getting iDOL without suffering from slippage or mispricing of LBT.

In future articles, we will go deep into the Manual Tranche functionality so stay tuned!

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