VulcanDex: Difference between revisions
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=== Liquidity Pool (LP) Staking === | === Liquidity Pool (LP) Staking === | ||
VulcanDex offers LP staking. For example, if you own [[PYR]] and MATIC tokens, you can put these tokens inside the liquidity pool and earn rewards. This is called yield farming. | |||
A DEX is made for trading tokens from one to another. You need to have | A DEX is made for trading tokens from one to another. You need to have enough of both tokens in order to be able to offer these trades. This is why the pools with tokens are created. | ||
VulcanDex is based on Uniswap 2.0 and acts the same with a different layer on top (NFT rewards, for example). For all asset pairs, liquidity pools exist on VulcanDex. Let's look at a hypothetical example for PYR-WETH: | |||
* Total liquidity = $1,000,000 inside both the PYR and WETH pool | * Total liquidity = $1,000,000 inside both the PYR and WETH pool | ||
| Line 34: | Line 34: | ||
* Total transactions = 10,000 (amount of transactions done) | * Total transactions = 10,000 (amount of transactions done) | ||
The example shows $1,000,000 worth of PYR and WETH inside the liquidity pool. These tokens are available to trade. 90,000 PYR is available. The price will move up if you buy PYR and the price will lower if you sell PYR to the pool. It is not possible to do a 100,000 PYR buy, as there are only 90,000 PYR tokens inside the pool. | |||
=== Single-Asset Staking === | === Single-Asset Staking === | ||
When you | When you add liquidity to a pool, you will receive special LP tokens. These will be available inside your wallet. You can trade these back for your tokens and the reward. VulcanDex offers single staking farms for LP tokens. You can, for example, put your LP tokens inside a pool and receive/win NFTs. This is unique to VulcanDex. | ||
== | == Blockchain Gaming == | ||
Gaming is a massive market | Gaming is a massive market, and the combination of gaming/NFTs and blockchain has created a lot of hype. VulcanDex plans to cover many well-known blockchain tokens and projects. Some of the projects have also partnered with VulcanDex and offer special NFTs for staking (such as Sandbox, for example). This is a brand new dimension for cryptocurrency DEX staking. | ||
== Fees and Costs == | == Fees and Costs == | ||
| Line 48: | Line 48: | ||
== Impermanent Loss == | == Impermanent Loss == | ||
Impermanent loss can be demonstrated as below: | |||
Let's assume that 1 ETH has the current equivalent of 500 PYR. And let's assume that the current liquidity pool size is 100 ETH : 50,000 PYR (equivalent to 200 ETH in total). | Let's assume that 1 ETH has the current equivalent of 500 PYR. And let's assume that the current liquidity pool size is 100 ETH : 50,000 PYR (equivalent to 200 ETH in total). | ||
| Line 54: | Line 54: | ||
If you now add 10 ETH and 5,000 PYR (in total equivalent to 20 ETH) to the liquidity pool, you contribute 10% of the liquidity and are entitled to 10% of the liquidity mining rewards. | If you now add 10 ETH and 5,000 PYR (in total equivalent to 20 ETH) to the liquidity pool, you contribute 10% of the liquidity and are entitled to 10% of the liquidity mining rewards. | ||
Let's assume someone uses | Let's assume someone uses VulcanDex and buys 5,000 PYR with 10 ETH. Now the pool looks like this: 110 ETH : 45,000 PYR (+10 ETH and minus 5,000 PYR). | ||
If you would like to withdraw your liquidity at this point, you can easily calculate this with your 10% share. | If you would like to withdraw your liquidity at this point, you can easily calculate this with your 10% share. | ||
Latest revision as of 14:31, 17 October 2022
VulcanDex is a decentralized exchange (DEX) for gaming tokens. VulcanDex rewards users with valuable NFTs besides the usual tokens.
Tokens and Pairs
Many projects are and will be listed on VulcanDex. The DEX currently has the following pairs and pools for NFT reward farms:
- PYR-USDC
- PYR-MATIC
- PYR-WETH
- PYR-LAVA
- PYR-GM
The DEX supports trading the in-game token, LAVA. This Play2Earn (P2E) token is the core token of many Vulcan Forged games. It is used as a reward for playing the games in the ecosystem.
The highlights of the first year of VulcanDex are as follows:
- First gaming token DEX
- Over 50 NFT farms filled
- More than 1,000 NFTs awarded
- $13.4M Total Value Locked (TVL) All-Time High
- Official DEX of the "Blockchain of Metaverses"
Liquidity Pool (LP) Staking and Single-Asset Staking
Liquidity Pool (LP) Staking
VulcanDex offers LP staking. For example, if you own PYR and MATIC tokens, you can put these tokens inside the liquidity pool and earn rewards. This is called yield farming.
A DEX is made for trading tokens from one to another. You need to have enough of both tokens in order to be able to offer these trades. This is why the pools with tokens are created.
VulcanDex is based on Uniswap 2.0 and acts the same with a different layer on top (NFT rewards, for example). For all asset pairs, liquidity pools exist on VulcanDex. Let's look at a hypothetical example for PYR-WETH:
- Total liquidity = $1,000,000 inside both the PYR and WETH pool
- Daily volume = $500,000 (trading volume in USD)
- Pooled WETH = 200 (amount of WETH inside the pool)
- Pooled PYR = 90,000 (amount of PYR inside the pool)
- Total transactions = 10,000 (amount of transactions done)
The example shows $1,000,000 worth of PYR and WETH inside the liquidity pool. These tokens are available to trade. 90,000 PYR is available. The price will move up if you buy PYR and the price will lower if you sell PYR to the pool. It is not possible to do a 100,000 PYR buy, as there are only 90,000 PYR tokens inside the pool.
Single-Asset Staking
When you add liquidity to a pool, you will receive special LP tokens. These will be available inside your wallet. You can trade these back for your tokens and the reward. VulcanDex offers single staking farms for LP tokens. You can, for example, put your LP tokens inside a pool and receive/win NFTs. This is unique to VulcanDex.
Blockchain Gaming
Gaming is a massive market, and the combination of gaming/NFTs and blockchain has created a lot of hype. VulcanDex plans to cover many well-known blockchain tokens and projects. Some of the projects have also partnered with VulcanDex and offer special NFTs for staking (such as Sandbox, for example). This is a brand new dimension for cryptocurrency DEX staking.
Fees and Costs
Liquidity providers earn a 0.2% fee on all trades proportional to their share of the pool. 0.1% is sent to support the growth of the project. Fees are added to the pool, accrue in real-time, and can be claimed by withdrawing your liquidity.
For example, let's assume 100,000 PYR is inside the pool, and 1 PYR is worth $100. You own 10% of the liquidity pool. When someone buys $10,000 worth of PYR, the fee is 0.2%, or $20. You will receive a share of $20 x 10% = $2. But this is for ALL transactions on the DEX. The amount could go up quickly when trading volume is high.
Impermanent Loss
Impermanent loss can be demonstrated as below:
Let's assume that 1 ETH has the current equivalent of 500 PYR. And let's assume that the current liquidity pool size is 100 ETH : 50,000 PYR (equivalent to 200 ETH in total).
If you now add 10 ETH and 5,000 PYR (in total equivalent to 20 ETH) to the liquidity pool, you contribute 10% of the liquidity and are entitled to 10% of the liquidity mining rewards.
Let's assume someone uses VulcanDex and buys 5,000 PYR with 10 ETH. Now the pool looks like this: 110 ETH : 45,000 PYR (+10 ETH and minus 5,000 PYR).
If you would like to withdraw your liquidity at this point, you can easily calculate this with your 10% share.
You would receive back 10% of 110 ETH (or 11 ETH) and 10% of 45,000 PYR (or 4,500 PYR).
You lost 500 PYR and gained 1 ETH. However, don't forget that you will receive your rewards on top of this.
This is called impermanent loss as you did not lose anything. You gained ETH, but you lost PYR.