Pool
Tokens can be deposited in the pool and earn rewards. As a reward, a certain amount of the fee is incurred when a swap occurs in the deposited pool.
Deposit coins in the pool by selecting the deposit range and fee tier.
You can earn more rewards if Swap transactions are active within the deposit range.
What is Pool?
WEMIX.Fi's pool is a feature that allows users to earn revenue in exchange for directly supplying liquidity to support swap services. When users deposit their crypto assets in the liquidity pool, they get a stake in the entire liquidity and receive a portion of the fees incurred by the swap service. Users can select the pool to deposit in according to their desired crypto assets, and the deposited assets can be freely withdrawn. The more active transactions are made through the pool where users deposit their assets, the more they earn.
The liquidity pool that supports the swap service consists of a pair of tokens each. The value of the token pairs that make up the liquidity pool is maintained at 1:1, and users' assets are also deposited in the same proportion. If a user holds both types of tokens, the same amount of value is deposited. However, if one type of token is swapped and deposited, a swap fee will be incurred, and the deposit may be canceled depending on the set value of the Slippage Rate.
Users can see the transaction volumes being processed in real-time through the real-time charts and predict their expected returns. In addition, users can deposit more or withdraw any amount of assets, and the profit according to the change in deposits is calculated in real-time.
Full and Concentrated Range Deposits
WEMIX.Fi's decentralized exchange(AMM) supports both Full Range and Concentrated Range Deposits.
WEMIX.Fi's 'Concentrated Range Deposit' service is designed with a focus on effectively adjusting liquidity provision and trading strategies to enhance capital efficiency. Through Concentrated Range Deposit, you can specify a particular deposit range to create a 'concentrated' liquidity position, minimizing losses and optimizing profits in response to price fluctuations.
Creating a liquidity position concentrated within a specific deposit range allows you to earn higher returns when Swap transactions occur within that range compared to depositing assets across the entire range. Liquidity providers have the option to set fee tiers when creating a position, with a total of four options available (0.01%, 0.05%, 0.25%, 1.00%), which can be adjusted based on the feature(stable or volatile) of the assets and price volatility.
Depending on the features of the assets you wish to deposit, you have the flexibility to set narrower deposit ranges when price fluctuations are small, or wider deposit ranges when price fluctuations are significant. Additionally, when price movements are anticipated, you can move the deposit ranges above or below the current exchange rate. However, it's important to note that if the current exchange rate moves outside the deposit range, you may not earn profits.
| Contents | Full Range Deposit | Concentrated Range Deposit |
|---|---|---|
Deposit range | Full range | Custom range |
APR | All users have the same profit rate | Profit rate is different for each user |
Liquidity | Provide liquidity to Swap regardless of the exchange rate | Provide liquidity to Swap at a selected exchange rate |
Fee tier | Fixed fee tier | Different fee tiers (0.01%, 0.05%, 0.25%, 1.00%) |
LP token | ERC20 | ERC721 |
Full Range Deposit
Manual Input
Users can deposit assets at the same rate or input their desired quantity directly. By depositing two tokens at 50:50, the quantity of tokens is automatically calculated, and if the desired quantity is entered directly, a swap fee will be incurred for an automatic 50:50 ratio adjustment. The reason why assets in the Pool remain at 50:50 can be found in the Pool: How it works.
Estimated Reward
Users can see the return they will receive for providing liquidity to the Pool. The expected reward is calculated according to the growth rate and share of the Pool. The more active the swaps are, or the more assets the user has deposited, the greater the returns they will receive.
LP Token
Users earn LP tokens by providing liquidity to the pool. It is used to prove the user's share in the total liquidity supplied to the pool. Real-time change in the LP tokens can be see during changes in deposits or withdraws.
Use Cases of Full Range Pools
Example 1) Depositing USDC in USDC-WEMIX$ Pool
Bob holds USDC tokens on WEMIX mainnet. Bob, who did not plan to utilize USDC, decided to deposit his assets and put them in a pool where he could get a stable return. Bob, who did not have WEMIX$, could select a USDC-WEMIX$ pool, directly input the amount of USDC to be deposited, swap 50% of the total value into WEMIX$, and deposit it into the pool. Bob's stake in the pool can be proven with LP tokens, and he was satisfied with the expected reward when depositing for more than six months but decided to monitor the deposited assets in case of non-permanent losses closely.
Example 2) Depositing WEMIX and WEMIX$ in WEMIX-WEMIX$ Pool
Alice has WEMIX and WEMIX$ on the WEMIX mainnet. Alice sees that transactions are actively taking place through the WEMIX-WEMIX$ pool and wants to earn money by directly supplying liquidity to the pool. Alice could divide her holdings by 50% of the total value and deposit them into the pool. Alice carefully observes the real-time chart and decides to withdraw her deposited assets if the volume of transactions through the pool or the value of WEMIX drops significantly.
Concentrated Range Deposit
Concentrated Range
One of the key features of Concentrated Range Deposit is that users can specify a particular exchange rate range when depositing their assets. This differs from the traditional approach, as it allows users to supply liquidity within a certain range by specifying the exchange rate range. It also enables users to create multiple positions for the same pair pool. Consequently, users can design their own strategies and enhance their profits.
Profits are generated when swaps occur within the range set by the user, depending on the current exchange rate, which may fluctuate based on market conditions and liquidity pool. However, it's important to keep in mind that profits are only earned when the exchange rate remains within the set range. In other words, profits are realized when swaps occur within the specific price range where the user has deposited their assets.
Moreover, users can adjust the position of their deposit range to align with their expectations of changes in the exchange rate, whether it's expected to decrease or increase. By closely monitoring market trends and adapting their deposit range accordingly, users can effectively generate profits with the liquidity they provide. In the event that the exchange rate moves differently from their predictions, users can modify their positions and adjust their strategies. The method for setting and modifying deposit range positions can be found in the service interface.
For instance, let's assume that a user supplies liquidity to a portion of the WEMIX-WEMIX$ pool. Considering the price volatility of WEMIX, if the user allocates 50% of their assets to a wider range and the remaining 50% to a narrower range closer to the current exchange rate, they have the potential to maximize their profits.
You can find detailed information about concentrated liquidity in the 'Operation Principles,' and guidance on managing positions in the 'User Guide.’
Non-Fungible Liquidity
Up until now, users who provided liquidity received ERC20-type LP tokens. These LP tokens consist of ERC20 tokens representing the unique price curve (x * y = k) for each LP. However, liquidity positions created through range deposits are now managed as irreplaceable ERC721 tokens or NFTs.
When users provide liquidity through range deposits, NFTs are transferred to their wallets, containing various information. This information includes details about the pool where liquidity was supplied, the range of exchange rates set, and the fee configuration within that range.
Since these positions are represented as NFTs, they represent valuable assets and should be securely stored. It's crucial to safeguard the wallet where the NFTs are stored and ensure that access to them is never lost. By doing so, users can securely manage their liquidity positions.
If you transfer your NFT to someone else, you will lose ownership, and your assets and positions will be irreversibly lost. Therefore, it is even more important to exercise caution in their management.
Flexible Fees
WEMIX.Fi's range deposit service offers four different deposit range fees for liquidity pools: 0.01%, 0.05%, 0.25%, and 1.00%. These various options ensure that liquidity providers can adjust their profits based on the expected volatility of the pairs they're supplying liquidity for. For example, liquidity providers who are willing to accept some level of risk, such as in pairs composed of assets with high volatility and stable assets like WEMIX-WEMIX$, can set higher fees. Conversely, those looking to minimize risk, as in pairs of stable assets like WEMIX$-oUSDC, can opt for lower fees.
Liquidity providers can select a pool and supply liquidity, and through the service interface, they can review the expected annual yield for each deposit range fee and the number of swaps conducted in that pool. This information helps liquidity providers make informed decisions about which deposit range fee to choose.
Use Cases of Concentrated Range Pools
Example 1) Using USDC-WEMIX Pool
Alice holds USDC and WEMIX on the WEMIX mainnet and wishes to provide liquidity to the pool to earn deposit rewards. After careful observation, Alice decided to opt for Range Deposit, as she believed that depositing across the entire range might not be necessary, given her belief that the WEMIX price wouldn't approach $0. She also anticipated a positive market situation with price increases.
After all her considerations, Alice decided to deposit liquidity in the USDC-WEMIX range deposit pool, where the current price of WEMIX was $1.5, and she expected it to rise. She chose to supply liquidity within the range of $1.2 to $2.5. While recognizing the risks associated with holding volatile assets and the potential need to readjust the range in case of volatility, Alice decided to accept the inconvenience and opted for the higher 1% deposit fee.
Example 2) Using USDC-WEMIX$ Pool
Bob holds WEMIX$ and USDC on the WEMIX mainnet and is averse to risks like impermanent losses. He also doesn't have the time to frequently adjust his deposit range. However, he still wants to earn income from his assets. As a result, Bob decided to deposit liquidity in the range deposit pool because he observed that stable coins remain fixed at $1, and he didn't want to risk losses by depositing across the entire range.
Furthermore, he noticed that with stable coins, there is no volatility, and liquidity providers mostly supply in the same range, which is why he chose to increase his competitiveness by opting for the lowest fee of 0.01%. While Bob may receive lower fees compared to Alice, he avoids the inconvenience of dealing with asset volatility and range adjustments.
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