USDN auto-staking enhances income for liquidity providers
USDN in Swop.fi pools is now staked automatically, and daily rewards are included in pools to increase earnings from providing liquidity.
In past weeks, each Swop.fi liquidity pool containing USDN, staked a portion of its USDN amount to the Neutrino smart contract.
USDN staking yields a sustainable, daily distributed reward. These payouts are added to the pool liquidity similar to swap fees, thus increasing the total amount of USDN and the value of each liquidity provider’s share. You can see the staking income on the pool information page.
As of now, USDN-containing pools start to automatically maintain a percentage of USDN staked between 97,2% and 99,20%. Please note: this is not the percentage of the entire pool liquidity, but only the USDN part. We adjusted the bounds so that most swaps can be executed without staking and unstaking transactions. In the future, the bounds may be revised.
If the total amount of USDN in the pool changes considerably, the smart contract has to stake or unstake some USDN and pay a network fee for the transaction. To cover the fees, we set an extra fee to add and remove liquidity (in addition to the network fee of 0.005 WAVES). The extra fee size is the minimum sponsored fee in USDN multiplied by 9, currently 0.03 × 9 = 0.27 USDN. The extra fee is only charged for USDN-containing pools, and usually staking rewards will quickly offset it.
What is USDN staking?
Neutrino USD (USDN) is an algorithmic stablecoin pegged to the US dollar and backed by WAVES. Neutrino protocol leverages the staking model of the Waves protocol’s underlying consensus algorithm. USDN staking yields a reward of up to ~ 15% APY. Roughly half of the total pool liquidity is staked (USDN is staked, but the other token is not), so the expected APY on staking in the pool is up to ~ 7.5%.
The size of USDN earnings always fluctuates and depends on the ratio of staked USDN in the total USDN supply and changes in the WAVES market capitalization. You can find out more in Neutrino Protocol FAQ.
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