Waves.Exchange liquidity pools: all you need to know
Waves.Exchange liquidity pools offer users a range of earning opportunities.
The liquidity pools recently launched on Waves.Exchange offer investors numerous opportunities for earning. In this post, we’ll look at how the pools operate and what you need to do to invest in the pools and start collecting passive income.
Liquidity pools
At the initial stage, these pools are available:
USDT/USDN
BTC/USDN
ETH/USDN
WAVES/USDN
The fact that all of these pools feature USDN, the Wave’s ecosystem’s flagship stablecoin, significantly reduces the risk of impermanent loss, as stablecoins have almost no volatility, compared with other crypto. For a pool in which both assets are volatile, the risk of impermanent loss could be higher. To learn more about USDN, see this post.
Providing liquidity
To invest in one of the pools, a user needs to deposit the same amount of both of the pool assets — for instance, USDN and WAVES for the WAVES-USDN pool. In exchange, they receive LP tokens, which could be at any time redeemed for the initially provided assets. For instance, in exchange for providing tokens to the WAVES-USDN liquidity pool, a user receives WAVESUSDNLP tokens.
For providing liquidity to a pool, users receive a basic APY, or vAPY, which can vary depending on trading activity with the pool’s liquidity.
To increase their incomes, a user will be able to stake their LP tokens and collect tAPY, which is even higher. Upon the issue of the WX token, a WX holder will be able to boost their reward tAPY by locking WX for a certain period of time.
Meanwhile, locked WX tokens also entitle the user to vote for pool weights, and they would be able, for instance, to vote for increasing the profitability of the pool to which they provided liquidity.
WX holders who have locked their assets also receive governance rewards which are made up by exchange fees collected by the pool. Exchange fees are paid on each exchange at the time of executing orders.
Competitive edge
Waves.Exchange liquidity pools have several major advantages over competitors.
- First of all, transaction fees in the Waves blockchain are fixed and, regardless of network load, extremely low, especially compared with notoriously exorbitant Ethereum fees. For a swap in a Waves.Exchange pool, a user pays just several US cents, compared with $50 and more on Ethereum.
- Second, all provided liquidity is used for spot trading, which is likely to attract more users and yet more liquidity.
- Finally, the interface is very straightforward and user-friendly, so that even newcomers to the DeFi space could easily get around it.
WX IDO
Early liquidity providers to Waves.Exchange pools will get a unique opportunity to participate in the first phase of an IDO for the exchange’s token, $WX, which began on Oct. 21. Project lightpaper is here.
The first 1 mln WX tokens will be distributed among early pool investors! Learn more about our early-bird program here.
IDO’s main phase will start on Nov 4. 50 mln tokens will be available for purchase for USDN, the flagship stable token of the entire Waves ecosystem, and the price will be only 1 USDN for 1 WX! To share all you need to know about Waves.Exchange liquidity pools and IDO, over the coming weeks, we are going to share articles, answer your questions and organize an AMA.
Moving forward
The launch of Waves.Exchange liquidity pools is just the first step. Apart from adding new liquidity pools, we’ll launch powerful governance tools for the entire ecosystem.
That will signify a transition towards a second stage in the development of what we believe is the best decentralized exchange. For more on Waves.Exchange’s plans, see our roadmap.
Just like it is the case with any investment tool, early liquidity providers to Waves.Exchange pools will be able to earn the highest rewards. So, hurry up to provide liquidity to Waves.Exchange pools!
