Liquidity Staking: What Is It and How Is It Done?
As you know, Bondly has partnered with Ferrum Network to bring a variety of staking options, including Liquidity Staking. In this article we explain everything you need to know about liquidity staking and how to participate.
What is Liquidity Staking?
Liquidity Staking is the process of staking the liquidity you add to the Bondly Uniswap pools (either ETH pool or USDT pool) and earning BONDLY rewards in return.
As many know, when Uniswap liquidity providers deposit liquidity (ETH/USDT + native tokens) into a Uniswap pool, special tokens known as liquidity tokens are minted to the provider’s address. Whenever a trade occurs, a 0.3% fee is distributed pro-rata to all LPs in the pool at the moment of the trade. In addition to earning fees, Uniswap also allows “liquidity providers can also choose to sell, transfer, or otherwise use (e.g. stake) their liquidity tokens in any way they see fit.” Therefore, using Liquidity Staking technology, liquidity providers can actually stake the LP tokens and earn rewards for doing so.
Why is staking an LP token valuable from the standpoint of an LP provider and the standpoint of Bondly?
For an LP provider, you are now doubly incentivized to maintain your LP token, because not only are you earning the trading fees, you are also earning rewards on top of that in the form of BONDLY tokens.
Bondly the project benefits from iquidity staking beause it means our community is helping us by adding liquidity to our Uniswap pools, and then staking that liquidity during the staking period. This helps maintain liquidity and reduce slippage, which can in turn increase trading activity.
Next we explain exactly how Liquidity Staking is done from the users standpoint.
Requirements for Staking
Please note the following requirements:
Metamask: BONDLY Liquidity Staking requires the ERC-20 wallet extension Metamask, which will automatically link to our staking contracts. This wallet will be used to contribute your token to the liquidity pool. It will also be used to distribute staking rewards upon withdrawal.
How to become an LP (Liquid provider)
- Go to app.uniswap.org and click ‘Pool’ on the top left. (Direct Link: https://app.uniswap.org/#/add/ETH/0x1DE5e000C41C8d35b9f1f4985C23988f05831057)
2. Click ‘Add Liquidity’ and enter BONDLY’s contract address in the token search fields
BONDLY Contract Address
3. Click on Supply and confirm that you will receive a minimum of Uniswap V2 Tokens and click Confirm Supply:
How to find UNI V2 tokens in MetaMask
If you are going to be staking LP tokens in Liquidity Staking, then here are some tips to help you so that you don’t worry when you don’t immediately see them in your wallet. There is a simple way to make them appear in your wallet, as is explained below.
1. Go back to your MetaMask wallet. Click on Assets. Scroll down and click Add Token.
2. Paste the following Token Contract Address: 0xD2dDa223b2617cB616c1580db421e4cFAe6a8a85
After entering the Token Contract Address, it will display UNI-V2. Please click next.
3. You will see this. Click Add Token. Now you will be able to see and manage your LP tokens in your MetaMask wallet. Remember they are ERC20 tokens, so you can transfer them to any Ethereum address.
You can now move your LP tokens from wallet to wallet.
Start Staking [BONDLY] Uni-V2 Pool Tokens
1. Go to our staking website;
2. Select either the ETH Liquidity Staking Pool or the USDT Pool and press “Stake” (when it opens);
3. Authorize your MetaMask to be connected to the staking smart contract;
4. After exploring the pool page and you are ready to stake, press “Stake”;
5. This will take you to the following page:
6. Next, input the amount of UniV2 Tokens you wish to stake;
7. MetaMask will pop up. Allow MetaMask to spend your Uni-V2 (i.e. send your Uni-V2 Tokens to the staking contract) and press “confirm”.
Please confirm whether the amount is correct and approve the allocation. Please note that you will receive two requests to confirm on Metamask after you clicked on Stake.
IMPORTANT NOTE ON TRANSACTION FEES: you can edit the Ethereum Network gas fee in MetaMask by pressing “edit” and choosing a custom gas fee. Note that lower fees have slower transaction times.
CAUTION: DO NOT DIRECTLY SEND UNI-V2 TOKENS TO THE STAKING CONTRACT, ONLY USE THE PROVIDED USER INTERFACE! ANY TOKEN SENT DIRECTLY WILL BE LOST.
The Reward Structures of the Bondly Liquidity Staking Pools
The terms of the ETH and USDT Liquidity Staking pools (rewards, lengths, minimum contribution, etc.) are detailed below:
- Rewards: Uniswap Trading Fees + 105% APY
- Full maturity: 60 days
- Early withdrawal starts: 30 days
- Early withdrawal rewards start at 40% APY + Trading Fees
- Pool size: Unlimited
- The time period to contribute: 7 days
- Minimum amount staked: 3000 BONDLY Tokens
General Overview of BONDLY Staking
To understand critical concepts such as staking pools, early withdraws, and redistributed rewards, please refer to our Bondly Staking Details.
Bondly is an interoperable, transparent, and portable swap protocol designed to revolutionize traditional escrow methods and make everyone into their own digital marketplace. Our family of trust-enabling DeFi products are designed to be a part of everyday buying and selling activities, giving peace of mind for swap or online purchases. Our product BProtect is a DeFi enabled eCommerce gateway specializing in integrating into your favorite online marketplaces very simply and easily with no integration fees, just staking tokens.