Liquidity Pools
Last updated
Last updated
In your Degen Account, you are able to use the full force of your own and borrowed funds to earn juicy yield in Liquidity Pools on Aerodrome. By using leverage in DegenPrime, you can provide more liquidity than you could on your own. That enables you to then farm more yield than you could on your own.
The partner protocol for the Liquidity Pools is , the main DEX on . It means that you can still provide liquidity to your favorite DEX with the same familiar interface, but this time with leveraged returns.
In the first column, you'll see the assets of the relevant pool that row covers. Underneath, it shows which protocol this pool is from. For now, all the pools are from Aerodrome. Later, this may expand to additional protocols. For more detailed information about the pool, you can click on the name of the pool, i.e. BTC - USDC, and it will redirect you to that pool on the Aerodrome app.
This one is a hidden gem in itself. Without clicking, the column will have an indication of your positions. A green checkmark means that all your positions in the pool are earning rewards. An orange one lets you know that at least one position is inactive and not earning rewards, while a red exclamation mark indicates all positions are inactive.
When you click on 'Show', this column will expand your interface and visualize the position(s) you have in this pool. Each position is reflected as a bar. The height of the bar indicates the size of the position, i.e. how much capital it is. The width shows the price-range that the position covers. Using this chart, you are able to precisely see which positions are where and adjust accordingly. This is also where you can remove specific positions or claim their fees and emissions.
The value shown here shows you the sum of all your positions in the pool in dollars. Keeping it simple.
If you want more details about your position(s), this is your column. The two numbers here represent how much of your capital is in each token. If the 'Value' column says $1,000, and ETH is 40% and AERO is 60%, that means a total of $400 is in ETH and $600 is in AERO.
When you hover over these percentages, you will see how much that is in terms of ETH and AERO respectively.
For the big-brains, you can use these values to hedge your Degen Account if you want to decrease your exposure. If you get your debt as close as possible to your composition, that will decrease the impact of price movements on your Degen Account.
No price impact, but farming yield on leverage - that's a viable strategy too, don't let the Degens tell you otherwise.
If there are fees, emissions, incentives or rewards that you can claim as a Liquidity Provider of this pool, this is where you can claim them. Most of it tends to be in AERO (for Aerodrome pools). Sometimes, you may also receive the underlying assets of the pool as rewards. Either way, a dollar-value is shown underneath the value in AERO to tell you how much you can claim in dollars.
This column shows you the total value locked of the integrated pool. That is the total value in the pool of Aerodrome, not only on DegenPrime.
As a general rule-of-thumb: the higher the TVL, the more stable the APR, and the lower the impermanent Loss (IL). This is because trading volume is a large factor in determining both APR and IL.
The APR shown here is the APR of the integrated pool. This is the percentage in rewards that you can receive as a Liquidity Provider.
APR is the classic annualizor. It takes the rewards of the past week, and shows what the percentage would be over the course of a full year. This percentage does not take into account any potential impermanent loss.
It does take into account a minor fee as (in full transparency) this is where DegenPrime is monetized. The entire app is free to use, aside from the interest on borrowed capital. Since these percentages already include that fee, when you see a 12,000% APR on a pool, you are getting that 12,000% APR on the pool - without having to share it!
What if you would take your Degen Account to its limits? The Max. APR is what you would be getting.
Again, an annualizor, but this time a leveraged annualizor. The maximum APR on a pool depends on two factors; the APR from the pool, and the lowest borrowing APY of all the assets.
It works like so. The Max APR assumes that you borrow to max capacity (let's call it 10% health), and that you borrow the asset with the lowest APY. If you then LP your full Degen Account into the pool, that'll get you the Max APR. Like a true Degenerate.
These pools aren´t just a pretty face, they are to be used (soon). With the Actions, you can interact with the pools in your Degen Account.
Add: If you already have the LP-token outside of your Degen Account, you can add them here. In the process of doing this, you add collateral to your Degen Account, thereby increasing the total value and health percentage. This means you can borrow more!
Create: This action uses assets within your Degen Account. In the pop-up window, you need to insert the number of assets to use for this position.
When creating an LP position, you will see the below pop-up window. This is where you define the parameters of your position, whilst being able to compare it to your other positions in the same pool. The other positions are greyed out and static, while the position you are adding will have a color and be dynamic according to the parameters. After you input the number of assets you would like to LP with, you will see the price range. This range will be set to a standard range at first. Using the + and - buttons you can adjust the price range for your position. Doing so, will automatically change the number of assets of your LP as well and you will see the active column in the chart change to reflect your position.
Removing a position only has one option: burn the NFT. This removes the liquidity from that position and retrieves the assets to your Degen Account. Afterwards, you are able to re-position your position again however you wish. Do note, there are two different buttons to remove liquidity:
The button on the pool in general (when positions are hidden) will remove all the positions you have in a Liquidity Pool and return all of the assets.
When positions are shown, however, you are able to remove a specific position by clicking on the minus button in the row of that position. This allows you to maintain your other positions and target a specific one in order to rebalance.
On this page, similar to , you see specific information for each Liquidity Pool.
Adding a position means that you will have an LP-token in your Degen Account. This LP-token is not directly visible in the interface, but does count towards the total value of your Degen Account. If you want to add a position, you have two options; add or create.
