Liquidity Mining
Last updated
Last updated
Liquidity Mining on Elys Network allows users to earn rewards by contributing liquidity to designated pools.
By adding assets to the liquidity pools, users not only facilitate smoother and more efficient trading within the network but also earn a share of the fees generated by multiple features. Liquidity mining provides an opportunity for users to passively earn while supporting the growth and stability of Elys Network’s decentralized exchange.
When users contribute liquidity to Elys Network, they deposit pairs or single sided tokens into a liquidity pool.
This pool serves as a reserve, allowing traders to swap tokens without depending on traditional order books, thereby minimizing slippage and enabling smooth trading experiences.
In return for their contribution, liquidity providers receive rewards from multiple features, which are distributed based on the amount of liquidity provided and the level of activity within the pool.
Elys Network offers two types of pools: classic AMM pools and Smart-Shielded Pools.
While classic AMM pools use a simple mechanism with a fixed 50:50 weight between each token, Smart-Shielded Pools feature a variable weight that adjusts according to market conditions. This makes them more efficient and reduces the risk of impermanent loss to nearly zero.
Unlike traditional Automated Market Makers (AMMs), the swap price on Elys SmartShielded Pools varies based on the pool's needs.
For example, in an BTC/USDC pool, if rebalancing requires a higher percentage of BTC, the fees for converting BTC to USDC will be low, and vice versa.
When a swap or liquidity provider improves the weight and brings it closer to the target, both the swap fee and weight-breaking fee are reduced to 0. Additionally, an incentive bonus, known as the "Pool Balance Reward" is provided from a "Bonus vault" specifically designed to reward users participating in the weight balance.
Our bonus Vault collects 10% of all swap fees and redistributes them to incentivized weight recovery.
Elys Smart-Shielded Pools offer several advantages:
Accurate asset prices
Arbitrage opportunities for traders thanks to low swap fees and our Weight recovery Reward system
Very low swap fees with negligible price impact
For more information about the mechanism:
