— Originally posted on the MetalSwap official blog
Today will provide an important insight into how liquidity pools work in the MetalSwap dApp. We will answer the question:
The answer is “from liquidity providers!” and with this article we will dive deep into this topic. At the moment, all liquidity is provided by the DeFi Foundation as this type of activity has not yet been promoted. In fact, we preferred not to reward those who provide liquidity so that we could be the only ones doing so in a relevant way during the first few months of the dApp’s life.
Here we learn how the provision of liquidity works on MetalSwap’s dApp, Live now on the ETH MainChain (and Goerli testnet!):
To access the service, simply log in at the address:
https://app.metalswap.finance/
for Ethereum Mainchain, resp
https://demo.metalswap.finance/
operate on Goerli testnet,
and then click on “Liquidity Pool” in the top menu.
We will see this following screen
With the Create New Position button, we can make our ETH, WBTC, USDT and the latest WPAXG liquidity available to those who need to open a swap on the other side!
For this we are rewarded with XMT and an NFT representing the liquidity provided, which we will discuss in a moment.
MetalSwap rewards liquidity provision with $XMT, thereby allocating the voting rights of MetalSwap’s DAO to those who actually use the platform, both from the liquidity provision side and from the side of a newly opened and actively held hedging swap.
Encouraging liquidity provision is important as it allows the entire system to scale with platform usage, allowing more people to use the hedging swap tool.
Understood? Choose your token, the liquidity you provide with it…
and just click on “Create position”!
If you are providing liquidity for the first time, you should click on ‘ELIGIBILITY’. Pay the Withholding Tax, click “CREATE POSITION” and wait for the transaction to be confirmed.
You will now see your NFT in the MY POSITIONS section.
These NFTs have a lock-up period to stabilize the liquidity of the whole system.
Don’t forget that the liquidity provided has a 14-day “lock-up” period before it can be withdrawn. This token represents your liquidity locked on the MetalSwap platform and accumulates rewards over time.
And this graphic says even more.
MetalSwap’s NFTs are unique digital assets minted using a combination of pseudo-random data from various sources, such as: B. the user’s address, NFT ID, creation timestamp, liquidity provided, block height and difficulty.
These NFTs are generated directly on-chain, so no decisions are made by a central server! This happens because we only store the creation parameters for the user position and the individual parts of this NFT are stored in a multiple system of smart contracts. In this sense, the image is recalculated each time it is requested with read methods so that the gas limit for NFT creation does not increase with the severity of the graphic elements.
As an example, one of the three different NFTs shown here is FULL FOIL, meaning it has a starry background and represents the liquidity WPAXG as indicated by the chip on the left and its class indicated on the top right. It is important to remember that the different rarities of NFTs do not affect the rewards.
Pseudo-randomness shuffles the following information under the deck and picks a specific one for a specific NFT.
The first, top right, is the class that can be
amethyst
emerald
gold
diamond
Then we have the limit which can be bronze, silver, gold or diamond. The colors of the background are chosen from 10 different variables.
And the FOIL probability always increases depending on the liquidity provided.
With FOIL comes the probability of the star shaped background.
The only non-random thing (except for the NFT’s progressive ID) is the chip that stays relative to the liquidity provided.
At the moment we have 3 different chips that represent:
ETH
USDT
WBTC
WPAXG (the wrapped version of PAXG)
If we click on it, we will see other commands: the Redeem Reward button, which was still gray in the early moments of our last NFT life, the ability to add or remove liquidity, and a handy tool to claim ownership of NFT directly from to transfer our dashboard to another public address!
The liquidity corresponds to that gold Asset is represented by WPAXG, a packaged version of PAXG. To better understand this mechanism, read our dedicated medium!
BALANCER
The “Balancer” refers to the software mechanism built into MetalSwap’s hedging swap tool that facilitates prioritization of new orders in one direction versus currently active ones. The balancer aims to incentivize balancing hedging orders towards an asset with more $XMT as a liquidity premium, i.e. in situations where all ETH swaps are bullish. In case the imbalance exceeds a certain threshold, the system activates liquidity protection, which allows opening new swaps in the downside protection direction until the platform is rebalanced.
Now that you have a solid understanding of how things work under the hood, it’s time to put the theory into practice and see these concepts in action under our hands!
Be sure to click the link to our latest YouTube video for a comprehensive demonstration that brings everything we’ve covered to life. Thanks for reading and we look forward to seeing you in the comments and in our Telegram group. Goodbye volatility!
To the MetalSwap
… and beyond!
-The DeFi Foundation
MetalSwap is a decentralized platform that enables hedging swaps in the financial markets, with the aim of providing a hedge for those working with commodities and an investment opportunity for those who help increase the project’s shared liquidity. Allows protection for an increasing number of operators.
With MetalSwap we enable hedge swap transactions by using AMM style smart contracts.
❗ METALSWAP admins or moderators will NEVER contact you directly on any social network.
❗ Everything related to $XMT smart contracts and addresses is shared from our official channels (list below), do not trust any information from other sources.
https://demo.metalswap.finance/
USDT Demo:0xD885375bF67fAB66e7d422a1Dad71f39527A818EWBTC Demo:0xf4027D47753cF54aB51315d1d0cBDF7183d7f8F0XMT Demo:0x5e789DB07183A902571bD7738D2D0E50297697C8WPAXG Demo:0xD1a700e84334992d698CBaD0Cc38e85934eF706CPAXG Demo:0x38deeE79b80e08f51B98f2228Ff8Cd7040d48458
Get Goerli tokens from MetalSwap’s faucet!
OFFICIAL WEBSITE 👉🏻 https://www.metalswap.finance/
YOUTUBE 👉🏻 https://www.youtube.com/channel/UCuFVZOpAOzuzlmJbPA4wdkw
MEDIUM 👉🏻 https://medium.com/metalswap
TWITTER 👉🏻 https://twitter.com/MetalSwapNet
DISCORD 👉🏻 https://discord.com/invite/eYay7NV6vF
TELEGRAM 👉🏻 https://t.me/metalswap
TELEGRAM TALK GROUPS 👇🏻👇🏻👇🏻
🇬🇧 https://t.me/joinchat/YaSNSVggeOFhODQ0
Learn Crypto Trading, Yield Farms, Income strategies and more at CrytoAnswers
https://nov.link/cryptoanswers
Comments are closed.