DEXs liquidity provision
Governance > IDLE token > Use-cases > Liquidity provision
Last updated
Governance > IDLE token > Use-cases > Liquidity provision
Last updated
Idle holders can provide liquidity to any of the decentralized trading pools in a trading pair such as IDLE/ETH. Providing Liquidity on AMMs generally requires an equal amount of ETH and IDLE.
A liquidity pool is a core mechanism of AMM (Automated Market Makers), where at least two assets are deposited to form a trading pair. Whenever liquidity is deposited into an AMM pool, specific tokens known as liquidity providers tokens (LP tokens) are minted and sent to the provider’s address. The proportion of the pool’s liquidity provided determines the number of liquidity tokens the provider receives, and so by staking your LP tokens into the Idle LP Staking Program, Liquidity Providers are entitled to receive additional rewards in the form of IDLE.
Pool: Sushi IDLE pool
Risks: Impermanent Loss and smart contract risk are the concerns to be aware of when providing liquidity at Sushiswap.
Insurance: Nexus Mutual offers an insurance service for SLP tokens covering contract bugs, economics attacks, or governance attacks.
Uniswap is another AMM pool, similar to Sushiswap, where $IDLE token holders can provide liquidity into the pool trading pair of your choice (e.g., IDLE-ETH, IDLE-DAI, etc.). Currently, Uniswap has a V2 and a V3. On Uniswap V3, as the Liquidity Provider, you can concentrate on the liquidity price range you would like to provide liquidity for.
Website: Uniswap
Pools: IDLE-ETH pool 1, IDLE-ETH pool 2
Risks: Impermanent Loss and smart contract risk are the concerns to be aware of when providing liquidity at Uniswap.
Insurance: Nexus Mutual offers an insurance service for Uniswap LP tokens covering contract bugs, economics attacks, or governance attacks.
Balancer is an Ethereum-based Automated Market Maker (AMM) protocol that functions as a decentralized exchange (DEx) and a “self-balancing” portfolio management tool. Balancer's AMM provides traders with liquidity for their ERC-20 tokens.
Website: Balancer
Pool: IDLE-USDC pool
Risks: Impermanent Loss and smart contract risk are the concerns to be aware of when providing liquidity at Loopring.
If you are using the Polygon network, you can provide liquidity on Sushiswap. Providing liquidity on the Sushiswap-Polygon AMM works exactly as it does on the Ethereum mainnet, with similar benefits and risks.
Website: IDLE-WMATIC pool
Risks: Impermanent Loss and smart contract risk are the concerns to be aware of when providing liquidity at Sushiswap.
