We are pleased to announce the launch of a new yield farm on MuesliSwap – iUSD/ADA. It is at the same time a pioneer and the first organic yield farm ever on Cardano. MuesliSwap is preparing to become a major platform for trading and earning stablecoins. Therefore, we will launch a yield farming program to incentivize liquidity allocation for the synthetic stablecoin iUSD on MuesliSwap.
If you are unfamiliar with Yield Farming, Cardano or MuesliSwap, check out this tutorial for a gentle introduction: https://www.youtube.com/watch?v=n4EcIyhzTPU
Unfamiliar with the concept of synthetic stablecoins? Learn more about iUSD in this article: https://indigoprotocol1.medium.com/stablecoins-are-coming-to-cardano-88ae524a43eb
What will agriculture look like?
To farm on MuesliSwap, deposit iUSD and ADA in the MuesliSwap iUSD liquidity pool. The liquidity tokens, which represent the share of the liquidity pool, are then stacked on the MuesliSwap platform. You will receive rewards in the form of ADA and MYield.
All relevant links can be found here: https://muesliswap.com/earn/farms
What is the emission/APR?
The APR of the iUSD/ADA pool is governed by our newly introduced organic issuance schedule. In general, this means that if the total TVL increases, everyone’s APR increases. This goes on until we have reached the desired liquidity of the pool. If smooth trading is guaranteed with little price impact, we don’t need further growth – at around 1M ADA.
We use the following formula to control token issuance, which is a parameterization of the formula we introduced earlier.
The organic yield farming formula
We choose k=1.5, early issuance = 50 MYield and target issuance = 25,000 MYield with the target liquidity of 1,000,000 ADA. The table below shows specific examples of APR based on TVL in the iUSD/ADA pool.
APR based on the formula parameters for different TVL amounts in the iUSD/ADA pool on MuesliSwap. *APR of trading fees based on 0.3% of swap fee and estimates of volume incurred.
Read more about organic farming in this Medium article: https://medium.com/@muesliswap/introducing-organic-farming-apr-abe86b65e785
When does it start? How long will it take?
The Yield Farm starts today, December 7th, 2022 at 21:00 UTC and is scheduled for 30 days. This means that the program will be readjusted on January 4th depending on the development of the pool and other staking programs such as Indigo Staking.
What about indigo staking? Do I have to move my liquidity?
The reason for the short 30-day schedule is simple. Indigo will launch its own liquidity pool yield farming program incentivized with INDY tokens on December 14th.
We are working with Indigo and the community to whitelist MuesliSwap LP tokens for INDY staking. That means you should be free to choose whether to stake at MuesliSwap or Indigo. The early start of MuesliSwap staking means you can start today at MuesliSwap and switch to Indigo later as there is no lock-up period for staking at MuesliSwap. The only thing that needs to be moved is the LP tokens, no liquidity needs to be moved.
If you would like to take the poll to whitelist MuesliSwap LP tokens for Indigo staking as well, see this link: https://forum.indigoprotocol.io/t/poll-to-whitelist- ada-iusd-muesliswap-lp-token /12423
It’s not enough! I want an APR of 1000%!!
At MuesliSwap, we strive to provide long-term incentives for users to provide liquidity on our exchange. We therefore advocate non-inflationary tokenomics and do not offer annual percentage rates that lead to rapid token debasement.
In addition, the pool involves a stablecoin and therefore has a much lower risk than other farms. The APR is therefore lower compared to other yield farms on MuesliSwap.
It is too much! An APR of 15% is never sustainable!
The yield farming program is currently scheduled for 30 days. We will evaluate how effective it was and adjust the token issuance afterwards. We are attempting to inject liquidity into MuesliSwap in order to establish ourselves as a key player in stablecoin trading and have therefore allocated part of our reserves to attracting stablecoin liquidity. In order not to exhaust them too quickly, a maximum reward emission is set in the formula above.
Sounds great – where do I start?
All relevant links can be found here: https://muesliswap.com/earn/farms
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Disclaimer: This article is for general informational purposes only. It does not constitute investment advice or a recommendation or a solicitation to buy or sell any investment and should not be relied upon in evaluating the merits of any investment decision. They should not be relied upon for accounting, legal or tax advice or investment recommendations.
UPDATE: Fixed a typo that made it appear like LP tokens = pinned tokens. That’s not the case. Now also including the estimated trading fee APR.
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