Thinking about providing liquidity for MYST but don’t want to get hit by impermanent loss? We have a solution!
Mysterium Network is excited to present the MYST Liquidity Engagement Campaign, which rewards liquidity providers for providing liquidity to the MYST/ETH pair on UniSwap.
Even though we are not able to reduce the risk from impermanent loss that occurs due to the price fluctuation, we can support our liquidity providers with rewards in MYST tokens
MYST Liquidity Engagement Campaign explained
In the video below, we break down how the MYST liquidity campaign on UniSwap will work and how rewards are calculated. You can read further in the blog post for more details as well.
First things first, what is impermanent loss?
Impermanent loss happens as you add liquidity to a liquidity pool, and the price of your deposited assets fluctuates. The bigger the change, the more exposed you are to impermanent loss.
Impermanent losses can be counteracted by trading fees, as is the case with UniSwap.
What is UniSwap?
Uniswap is a DeFi protocol which allows for the exchange of tokens in a decentralised manner. While we are gearing up towards a listing on a tier one exchange in 2021, UniSwap remains a primary gateway into the MYST ecosystem on Ethereum.
As mentioned before, impermanent losses can be counteracted by trading fees. UniSwap charges 0.3% for every trade. This goes directly to UniSwap liquidity providers. Now for the cherry on top.
How does the MYST Liquidity Engagement Campaign reduce your risk and give you more rewards?
We are rewarding each participant in the MYST liquidity engagement campaign based on the amount of funds supplied and the duration for which liquidity is locked in the UniSwap protocol.
MYST liquidity engagement campaign details:
Monday, 5th January 2021, 2 PM UTC.
We plan to run the MYST liquidity engagement campaign on UniSwap for 3 months, until the 3rd April 2021.
Our goal with this campaign is to double MYST liquidity on UniSwap. We will review the success of this campaign after 4 weeks on the 4th February 2021. Following this, we will evaluate engagement and feedback from the Mysterium community.
Should we see uptake from the wider Mysterium community during the first month, we will prolong the campaign for the next two months.
How are rewards calculated?
When you provide liquidity on UniSwap, UniSwap mints liquidity tokens proportionate to the added liquidity. This allows us to calculate each liquidity provider’s engagement.
Our program analyses UniSwap liquidity token distribution at each block and proportionally distributes tokens to liquidity providers participating in the campaign.
MYST tokens will be distributed as rewards to liquidity providers for the MYST/ETH pool on UniSwap V2 each week. 0.15 MYST tokens will be allocated to each Ethereum block. This will vary alongside price fluctuation.
We have allocated up to 30,000 MYST for the month of January. This is subject to change depending on number blocks per period and price of $MYST.
Minimal time tick on blockchains usually is one block, which on Ethereum blockchain occurs every 13-15 seconds. Approximately 6,700 Ethereum blocks are mined each day. This means that liquidity providers will divide 1,005 MYST tokens per day between themselves based on how much each of them has contributed to the liquidity pool.
You can use the following formula to calculate your potential rewards:
Your UNI-V2 pool tokens * 0.15 / total supply provided by liquidity providers in campaign
There is no minimum or maximum amount of funds required to participate. Every liquidity provider will be awarded proportionally. We reserve the rights to change the reward size as the program matures.
How do you get involved and earn MYST for providing liquidity?
To stake and begin earning MYST liquidity mining rewards:
- You must deposit an equal value of MYST and ETH tokens to the MYST/ETH pool on Uniswap V2.
- After successfully contributing your cryptocurrencies, you will receive UNI-V2 pool tokens representing your share of the MYST/ETH liquidity pool.
- You can monitor the size of the pool and your share of it here. We are excluding Mysterium Network’s share of liquidity in how rewards are calculated.
- You can add or remove liquidity at any time as our system will track the liquidity pool within each Ethereum block. Every time there is a change of distribution in the pool, reward proportions will be adjusted accordingly.
You provide $10,000 worth of liquidity for a week while the total liquidity pool is $200,000 (excluding liquidity provided by the Mysterium team).
Your share of provided liquidity is 5%; therefore, you will receive 5% of all token rewards distributed during the week.
The total reward amount for the week is 7,035 MYST tokens, so your share of 5% will result in 351.8 MYST tokens.
How are rewards distributed?
Each block earning is summarized. You can claim your earnings at any time using the claim button on our liquidity campaign leaderboard on liquidity.mysterium.network.
Alternatively, we will airdrop the rewards once per week due to high Ethereum transaction costs to the liquidity providers that earned more than 500 MYST tokens.
How can you track and claim your rewards?
Want to track how much you’ve earned in the MYST liquidity engagement campaign? Looking to claim your rewards? Check out our step by step help guide.
Why invest in growing MYST liquidity pool on UniSwap?
We are focused on building a healthy MYST ecosystem so that community members can enter large positions with as small a price slippage as possible. For this we are seeking to create incentives for the wider Mysterium community to benefit from providing liquidity on UniSwap. This is the first of many campaigns like this to come.
Join us in making the world a more open place.
Mysterium Network is at its core a grassroots project, run for the people, by the people. We’ve seen more than 100x growth within our network in 2020.
Now more than ever it is pertinent that we seek community based incentives to grow a healthy MYST ecosystem that matches our growth in users and node runners.
We’re excited to meet our future MYST liquidity providers. Get started now.