Pirate Chain Guide: wARRR on Ethereum
What do you get when you wrap Pirate Chain’s native coin, $ARRR, in a token? wARRR! In this guide we explain what wARRR is, what its good for, and walk through how to earn passive income staking liquidity.
For over a year the Pirate Chain community has enjoyed earning passive income staking wARRR on the Binance Smart Chain network. We are proud to announce that wARRR is spreading and its now available on the Ethereum network!
This means not only can you earn passive income staking your funds in the Balancer 80/20 liquidity pool, it is also now easier than ever to transfer value between Ethereum, BSC, and the Pirate Chain networks. Using the bridge, 1 wARRR always equals 1 ARRR, across all three networks.
TL;DR This guide explains wARRR, liquidity pools, and staking. You can skip ahead for instructions on how to obtain wARRR and begin earning passive income if you already understand the risks.
WHAT IS wARRR?
Pirate Chain is a decentralized cryptocurrency network that is focused on privacy. When you make a transaction on the Pirate Chain network there is no middleman and no history, just like using cash between friends. Pirate Chain’s native coin is called ARRR.
wARRR, is a tokenized version of ARRR. The process of converting a coin, to token, is known as wrapping. wARRR is wrapped ARRR, making it usable on Etehreum and BSC networks. This video helps explain this process.
It is important to know that while all P2P transactions on the Pirate Chain network are private. All transactions with wARRR on the Ethereum and Binance networks are transparent.
Tokenomics:
Supply: 200M (2.25M available in the bridge, remainder locked)
Fees: 1% (0.5% to liquidity providers, 0.5% to the Community Funds Pool)
Token contract: 0x057acee6df29ecc20e87a77783838d90858c5e83
LP token contract: 0xb53f8f2907d8e5fed503f8ebce4433fb5c5beae2
Balancer Pool: LINK
Bridge fees:
ARRR -> BSC = 4 ARRR
ETH -> BSC = 4 wARRR
ARRR -> ETH = 8 ARRR
BSC -> ETH = 8 wARRR
BSC/ETH -> ARRR = 1 wARRR
(note: as prices change, the fees may be adjusted)
WHAT IS IT GOOD FOR?
By creating a wrapped version of ARRR, a key piece of infrastructure must exist to make everything work. That’s the bridge. Initially there are no wARRR in circulation. For each ARRR that a user wraps by sending it to the bridge, they receive 1 wARRR. At any point you may unwrap by sending wARRR back through the bridge in exchange for ARRR.
Through the bridge, 1 wARRR always equals 1 ARRR. This makes it as easy as possible to move your value between the Pirate Chain network, and ETH or BSC networks. While transactions on ETH and BSC networks are transparent, at any time you can convert your wARRR back to full privacy on the Pirate Chain network.
Once you have wARRR, it makes it possible to interact with all the many EVM tools out there. You can use exchanges like Balancer or pancakeswap. You can also stake your wARRR in a liquidity pool to earn a passive income.
WHAT ARE LIQUIDITY POOLS?
Liquidity pools are a modern way of exchanging value between tokens. Most are familiar with the order book method of exchanging. Just like in the stock market, participants post buy and sell orders in an order book. You can take an existing order if you like the price, or you can make a order in hopes that it will be matched at the price chose.
If you want to buy 100 of something now, but there are only 30 for sale at the current price, your buy order may consume all the orders above it, increasing the price significantly. In this case, that market is said to have low liquidity.
Commonly with tokens you will not find this sort of exchange due to liquidity issues, but rather Automated Market Makers (AMM). In this model, participants pool together funds. If you have one token, and would like to swap it for another, a automated system will fill your order from the pool. The fees for this trade are split among the participants that have provided liquidity, equal to their share of the pool.
Read more about what a AMM is: https://academy.binance.com/en/articles/what-is-an-automated-market-maker-amm
On the BSC network, the pool is in panckeswap. On the Ethereum network we use Balancer for more flexibility and options. If you would like to read more about Blancer, this is a good article:
ARE THERE RISKS?
It is important before you consider providing liquidity to understand the risks. One of the most important aspects to understand is the term impermanent loss.
When you add funds to a liquidity pool, typically you will provide 50% of one token, and 50% of another. The AMM then uses the funds you have deposited to fill orders. It attempts to do so in a way that keeps your balance as close to 50/50 as possible.
This works well when markets are stable, but lets say one of your pairs gets extremely popular and its price begins to increase. As people trade the less popular one for the more popular, your balance will shift from 50/50, to holding more of the LESS popular token. This means that if you think the value of a token you own is going to increase dramatically in price, you may do better to simply hold that token rather than have it in a liquidity pool.
Impermanent loss is explained well in the article: https://academy.binance.com/en/articles/impermanent-loss-explained
Another consideration, especially on the Ethereum network, is fees. Currently the full process of staking liquidity may cost you are $20 in fees. This is currently quiet low at the time of this article. In periods of high demand, these fees could become 10x that! Therefore if you staked only $200 worth today, and fees increased, you could spend the majority of your Liquidity Position just in fees!
It is important that all these aspects are carefully considered. Be sure to do your own research. If you have questions, the Pirate Chain community is more than happy to help explain the risks and benefits. Come chat with us:
WHAT IS STAKING?
When you add your funds to a liquidity pool, this is known as a Liquidity Position. Typically the platform will split some small amount of the fees with the participants. This alone is not enough to make the risk worth the reward.
In exchange for the wARRR you provide to a liquidity pool, you will receive LP tokens which represent your liquidity position. You may then stake these LP tokens to earn your share of the fees. Every wARRR transaction has a 1% fee. Half is donated to the Community Funds Pool which supports the Pirate Chain network development and operations. The other half goes to the stake holders, in proportion to their share of the liquidity pool.
LIQUIDITY AND STAKING GUIDE
This section describes how to obtain wARRR through the bridge, provide liquidity, stake LP tokens, and earn passive income. This is specifically for the wARRR on the Ethereum Network. For the Binance Smart Chain, please refer to this guide:
Overview:
Setup a wallet
Acquire wARRR through the Bridge
Get some ETH for gas
Acquire wETH for the liquidity pair
Provide Liquidity
Stake LP tokens
Setup Wallet
The first step is to setup a wallet. For staking large amounts, we recommend using a hardware wallet. For this guide we will use MetaMask as it is the most popular. Any web3 wallet capable of interacting with smart contracts should work.
To install MetaMask, simply add the browser extension here:
Be sure to use a string password and backup your seed-phrase.
Once you have Meta Mask installed, I always recommend making an address that is ONLY used for staking. Separating accounts and never making transactions between them is one way you can extend the privacy of Pirate Chain to wARRR.
In MetaMask, click the account icon in the top right, then select “+ Create Account”
Name the account something that will help you remember what the purpose of that address is for.
You will now see your new address at the top of the wallet, and listed in your list of accounts.
Next, lets add the tokens to the wallet so we can see the balances once we have some.
Click “assets”, then at the bottom of the screen click “import tokens”, then select “custom tokens”
Enter the following details:
Token Address: 0x057acee6DF29EcC20e87A77783838d90858c5E83
Token symbol: wARRR
Token Decimal: 8
Repeat the process above to add the LP token:
Token Address: 0xB53f8F2907d8E5fED503f8ebCe4433FB5c5BEae2
Token symbol: wARRR-LP
Token Decimal: 18
Acquire wARRR
Now that we have a wallet installed, and the token addresses added, its now time to acquire some wARRR through the bridge. Start by opening your Pirate Chain wallet, then heading to https://warrr.io
Here you will find a form where you can select which network you are sending from, and which network you are sending to. You can send to/from any combination of Pirate, Ethereum, and BSC networks.
Select Pirate Chain as the source network, and Ethereum as the destination network. Click the “convert” button where you will then be provided a deposit address.
Double check that the 0x… destination address is correct and matches your wARRR wallet address. In the center you will see a zs1… deposit address. This is the address you will send your ARRR to. You will receive 1 wARRR for every ARRR that you send (less the fee). Open your Pirate Chain wallet, and send the amount you would like converted to wARRR to this deposit address. Once complete, the wARRR will show in your metamask account.
While on this screen, make note of the contact email address. The swap can take 30 mins (or in cases of high traffic, a bit more), but if after a couple of hours you have not received your funds or for any other issues, email support@polarity.exchange.
Acquire ETH for gas
While the bridge conversion is running, leave that tab open and open a new one. To make transactions and interact with contracts on the Ethereum network you will need ETH for gas.
At the time of this article, the full staking process cost around $25 in ETH fees. This is quite low, and at times of high traffic it can be 10x that. Always be sure to not stake everything and leave some for any possible gas fees.
Many Pirate Chain users already have Edge app. If you do you could exchange some ARRR for ETH in the built in exchange. Alternatively, you may choose to use an exchange, or a swap service like SimpleSwap.
Acquire wETH for the liquidity pool
Once your wARRR has arrived from the bridge, its time to get some wETH for the liquidity pool. The balancer liquidity pool is a 80/20 pool. This means you will need 80% wARRR, and 20% wETH (by USD value).
You can acquire the needed wETH in many ways, but the simplest is to simply use the pool! Find the swap section of Balancer here:
In the top right, click to connect your metamask wallet. You will need to open Metamask to approve the connection. Once connected, select wARRR to wETH. Here you will convert 20% of your wARRR (by USD value) to wETH.
If wETH does not show in your wallet after making the exchange, you can add wETH by going to https://coinmarketcap.com/currencies/weth/ and clicking the small firefox icon next to the contract address
Provide Liquidity
At this point we now have our wallet setup, the wARRR we want to stake, the 20% wETH, and ETH for gas. Its time to go ahead and add liquidity!
Head over to the Balancer liquidity pool: https://app.balancer.fi/#/ethereum/pool/0xb53f8f2907d8e5fed503f8ebce4433fb5c5beae200020000000000000000041e
If you have not already, connect your wallet, and approve the connection in Metamask
Click “Add Liquidity”, then enter the amount of wARRR and wETH you intend to add to the liquidity pool. When you fill out one side, it will calculate how much of the other you need for the 80/20 balance.
Click preview to review your transactions, and submit the transaction. You will need to approve in your metamask wallet.
Once the transaction has confirmed on the Ethereum blockchain, you will be able to check your liquidity position by clicking “My Liquidity” under the pool details.
You will also notice that your wARRR and wETH balances no longer show in your wallet (they are locked in the pool contract). In exchange, you will now have wARRR-LP tokens representing your liquidity position.
Stake LP
If you now have LP tokens in your wallet, we are at the final step. You have successfully setup a wallet and provided liquidity. You will earn a small percentage from the pool, but to begin earning your share of the fees you must stake your LP tokens.
In a browser, go to https://warrr.io/staking, and connect your metamask wallet.
Click the “max” button to enter the total amount of LP tokens in your wallet. Click the “Approve” button, and then confirm Metamask. Once the approval completes, click “Stake” and approve in Metamask.
For a moment it may appear nothing is happening. Wait for the transaction to confirm on the Ethereum network. Once it does, you will now see the “Your Stats” section at the bottom update.
Over time you will see the claimable wARRR balance increase. You may even see it fluctuate up and down at times, but overall it will increase as transactions and swaps occur.
Although it says clam once daily on here, you will need to determine for yourself how often to claim rewards. Because of the gas fees, claiming too often would be cost prohibitive. You will likely only want to withdraw when the balance gets high enough to be worth it. Its a good idea to target periods with low network usage for lower fees.
What you do with the rewards is up to you. Some people swap 20% of the rewards for wETH and restake. At any time you are ready, you can unstake from teh pool and can use the bridge to convert back to ARRR.
Conclusion
If you have completed this guide, you should now have a rudimentary understanding of Liquidity pools, and the risks associated with them. You will have also acquired wARRR, provided liquidity on Balancer, and staked your LP tokens to begin earning your portion of the fees. You are now earning a passive income!
Remember to stay up to date on the Pirate Chain Discord. With Balancer, it may be possible in the future for the community to allocate funds to increase the rewards for certain periods. You may also want to reach out to the community if you have any questions setting this up.
Learn more at: https://pirate.black
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