ADX Farming: Announcing Incentivized Liquidity Providing on Uniswap/Balancer
Posted by AdEx Network on November 17th, 2020StakingADXDeFiYield farming
We are delighted to announce a new ADX incentive program (a.k.a farm) for liquidity providers: over 2 million ADX will be distributed to people who supply liquidity on the Balancer ADX/yUDS pool, Uniswap ADX/ETH pool and other community requested pools.
The program starts at around 16:40:00 UTC on Friday, Nov 20, 2020 (Ethereum block 11296000) and will last approximately for 30 days until Sunday, December 20, 2020.
The main incentivized pools are:
- ADX/yUSD on Balancer, which will receive 1,500,000 ADX; and
- ADX/ETH on Uniswap, which will receive 750,000 ADX.
It’s important to note that AdEx Network will not be participating in ADX farming as a company. Instead, we have transferred all liquidity pool tokens (LP) we hold to our multisig, so the community can verify we are not using them for farming.
How to participate?
To participate, you need to deposit funds into one of the pools, and you’ll receive a special LP token representing your share in that pool. You can then stake this LP token on the Farm page of our staking portal to start incurring ADX rewards. This page also contains links to the respective Uniswap/Balancer pools.
Rewards will be proportional to the amount of liquidity you’re providing, and updated each block.
If you’re participating in the Balancer pool, you have the option of only one asset (e.g. only yUSD instead of both ADX and yUSD), but keep in mind this will instantly convert your position to the respective 70%-30% split ADX/yUSD that the pool mandates.
In order to increase the awareness of AdEx within the various other communities, we’re allocating a small portion of the LP rewards to pairs that do not include ADX. Each of these pools will be allocated a total of 250k ADX over 20 days.
The list of pairs is as follows:
- ETH/BAL on Balancer
- ETH/YFI on Uniswap
- ETH/UNI on Uniswap
- ETH/LINK on Uniswap
Keep in mind we may be adding more community-requested pools during the course of farming. Please let us know what your favorite Uniswap/Balancer pools are, so we can take them into consideration.
What’s the APY
At this point, it is too early to project the APY of this farm, because we don’t know the amount of liquidity that will be staked yet.
To calculate the APY, you have to consider the rewards allocated to a specific pool, time period, and the current value of all LP tokens deposited into the pool. For example, if there’s a total of $200k worth of LP tokens in the pool, 1.5 million ADX over 30 days rewarded for ADX/yUSD, and one ADX costs $0.25, then the APY is
(1500000/30*365 * 0.25)/200000 = 2281.25%
Because farming only goes on for 30 days, it’s better to calculate the reward for the farming period itself:
(1500000 * 0.25)/200000 = 187.5%.
We use a fork of the MasterChef contract which has been battle tested and ran without significant issues or vulnerabilities on Sushiwap, Sakeswap, PICKLE and others. The
migrate method has been removed, which means that only depositors themselves have access to their funds.
Additionally, we’ve subjected it to internal reviews/tests by our team, and found no significant issues.
You can review the contract here: https://etherscan.io/address/0xc0223ab23b519260ae7c52dfb0a3dff65da8385a
We recommend participating in this only if you’re experienced in providing liquidity on Uniswap/Balancer, as it’s riskier and harder than normal staking.
You may be subjected to impermanent loss, as well as to additional smart contract risks from keeping your funds on Balancer, Uniswap, yearn and Curve (in case of yUSD). While all these projects are heavily audited with a solid security track record, more complexity always equals more risk.
The ADX-LOYALTY pool
Currently, ADX-LOYALTY can be minted by depositing ADX to the loyalty pool, but once the maximum of 25 million ADX locked up is reached, the only way to obtain ADX-LOYALTY will be by using public markets, such as Balancer and Uniswap.
Later during the farming period, we will be creating a Balancer pool for ADX-LOYALTY against yUSD and allocating a significant amount of ADX (1+ million) to it, enabling farmers to quad-dip into rewards and earn from yUSD (earning interest and Curve swap fees), ADX (earning from holding ADX-LOYALTY), Balancer swap fees, BAL rewards and finally, of course, ADX rewards for providing liquidity.