Crypto Academy week 15- Homework Post for Professor @sapwood | Liquidity Mining ( Tron- Sun.io)
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Liquidity Mining
One of the major setbacks in Decentralized exchanges (DEX) is liquidity issues. Unlike the Centralized exchanges (CEX) where there is no such problem as order books are there which allow traders to easily place orders in the exchange. The advent of Automated Market Maker (AMM) have solved the liquidity issues in DEX and also create opportunities for users to provide liquidity by depositing assets to the pool to receive a share of the trading fees. In this post, we will be exploring justswap.io and sun.io for this activity of liquidity mining.
How to Connect Tronlink Wallet to Sun.io?
To connect Tronlink wallet to Sun.io, follow the steps below.
Steps includes:
- Open your Tronlink wallet and click on the Discover at the bottom page to access DApps features.
- On Discover page, Sun.io appear as a popular DApp on Tronlink wallet. You can click on the icon to be redirected to Sun.io page. Similarly, you can also use the search tab and type in sun.io to visit the page.
- Since I'm accessing sun.io from Tronlink wallet, my wallet will automatically be connected to the platform. To confirm this, click on the 3 horizontal lines at the top right corner of the page for a dropdown menu. We can see that my Tronlink wallet is connected to sun.io. This can be seen in the screenshot below.
From the screenshots above, we can see that I have successfully connected my Tronlink wallet to sun.io.
What are the Different liquidity mining pools? Which one offers the highest APY? How many different rewards do I get by staking LP token?
Currently, there are 9 liquidity mining pools on sun.io. This includes:
- USDT-TRX LP with 4.67% APY
- USDJ-TRX LP with 6.17% APY
- TUSD-TRX LP with 19.52% APY
- SUNOLD-TRX LP with 36.06% APY
- WBTT-TRX LP with 6.01% APY
- JUST-TRX LP with 5.6% APY
- BTC-TRX LP with 5.78% APY
- ETH-TRX LP with 3.91% APY
- WIN-TRX LP with 7.44% APY
The screenshots below shows the 9 liquidity mining pools with the total amount staked and also the different mining rewards.
Liquidity pools with the highest APY
The liquidity pools with the highest APY is SUNOLD-TRX LP with an APY of 36.06%. This can be seen in the screenshot below.
The different reward to get by staking LP token
There are currently 5 rewards an investor can get by staking LP tokens. This includes:
- TRX (Tron)
- JST (JUST)
- WIN (WINK)
- SUN (Sun)
- BTT (BitTorrent)
The percentage of the rewards vary and depends on the liquidity pools. The screenshot below shows the reward and percentage for staking LP token on SUNOLD-TRX LP.
How do I obtain LP token by adding liquidity in Justswap? What is the quantity(Explore through your wallet/Tronscan)? (Screenshots needed)
In this section, I will be explaining how to obtain LP token by adding liquidity in Justswap. Also, I will be accessing Justswap from Tronlink wallet. The steps involved include:
- From Tronlink wallet App, click on Discover at the bottom page. On the Discover page, Justswap is a popular DApp on Tronlink and you can access the page by clicking the icon. Similarly, you can use the search tab and type in Justswap.io.
- On Justswap landing page, switch to pool and click on add liquidity.
- After that, select the pair you want to add. I will select USDT-TRX pair to supply 4 TRX and 0.32 USDT. After inputting the amount to supply, click on supply.
- After you have clicked supply, a smart contract is triggered. Click on confirm and input your Tronlink wallet to sign the transaction.
The screenshot below shows that I have successfully added liquidity on Justswap.io to obtain LP token.
Quantity of LP token obtained
By adding liquidity to Justswap.io which I did by supplying 4TRX and 0.32 USDT into USDT-TRX pair, I was able to obtain 5.131 S-USDT-TRX LP token. The transaction details can be shown in the screenshot from Tronscan
From the details from Tronscan, we can see that the transaction is a smart contract triggered transaction which consumed both Bandwith and Energy. Similarly, the transaction action showed that, 4 TRX and 0.32 USDT was added to Justswap liquidity to receive 5.13 S-USDT-TRX LP token.
Summary of Transaction
- Transaction type: Smart contract triggered.
- Transaction action: Supplied 4 TRX and 0.32 USDT and received 5.13 S-USDT-TRX LP token.
- Bandwidth consumed: 383 Bandwidth
- Energy consumed: 60,902 Energy
- Transaction fee: 8.52 TRX which was burned for Energy consumed.
How to Stake LP token to earn five different tokens on Sun.io?
To stake LP token to earn five different tokens on Sun.io, I will be accessing Sun.io from Tronlink wallet. The steps involved in staking LP token on Sun.io includes:
- From Tronlink wallet, click on Discover at the bottom page. Sun.io is one of the popular DApps which appear on the Discover page. Click on it to be redirected to Sun.io platform. Similarly, you can access the platform using the search tab. From the search tab, type in Sun.io and press enter to be redirected to the platform. This can be shown below.
- On Sun.io landing page, scroll down and select any liquidity pool of your choice. In this case, I will select USDT-TRX LP to earn 4.57% APY.
- After that, click on select. A pop message shows up seeking approval to participate in USDT-TRX LP mining from your wallet. Click on approve and sign in using your Tronlink password.
- After that, the transaction is approved.
- After you have approved to participate in Liquidity mining from your wallet, the staking page pop up appears. Input the amount of USDT-TRX LP token to stake. In this case, I will be staking 5.13 USDT-TRX LP token. After that, click on stake.
- After that, confirm and sign the transaction using your Tronlink wallet password. This can be illustrated in the screenshot below.
After I have successfully staked USDT-TRX LP token, we can see on Sun.io homepage under the liquidity mining pool that I have successfully staked USDT-TRX LP token to earn a Total APY of 4.57% which includes 1.55% of TRX, 0.93% of SUNOLD, 0.93% of JST, 0.82% of BTT, and 0.32% of WIN. This can be shown in the screenshot below.
which reward (out of the five different rewards) can be withdrawn at any time? How do you claim that?
Out of the 5 different rewards to be earned by staking LP token on Sun.io, only 33% of SUN is available to be withdrawn at any time. The remaining rewards consist of the total undistributed rewards which are withdrawn on a scheduled basis. This is usually on weekly basis up to a period of 24 weeks.
Steps in claiming rewards from staked LP tokens
To claim the rewards from staked LP token, follow the steps below.
- On Sun.io homepage, scroll down to the Liquidity mining pool you staked your LP token and click on manage. In this case, I will select USDT-TRX I staked LP token to.
- On the landing page, we can that only SUN (33% of SUN reward) was available to be claimed at the moment while other distributed rewards were frozen to be available at scheduled interval.
- Click on claim to claim the SUN reward available.
- After that, confirm and sign the transaction using your Tronlink password. After that, the transaction will be submitted. This can be shown in the screenshot below.
The screenshot below shows the transaction details of the claimed SUN on my Tronlink wallet.
What is the schedule of unlocking the mining rewards? Indicate the total undistributed/ distributed mining rewards in the screenshot?
There are 5 different mining rewards which include SUN, TRX, BTT, WIN, and JST. Only 33% of SUN is available to be claimed anytime. The remaining rewards are locked to be withdrawn on weekly schedules which can last up to a period of 24 Weeks.
From the screenshot below, we can see that I have 0 SUN available to be withdrawn which is 33% of SUN LP reward. The remaining distributed rewards are less than $0.001 in total. This value will increase with time as long as my LP token remains unstaked.
Include the real example of your interaction with Justswap and Sun.io as required in this task?Indicate how a "stake"(in Sun.io) function consumes different "Energy & Bandwidth" than "obtaining LP token" (in Justswap)? You should add/remove a small amount of liquidity to obtain/redeem your LP token(as little as 1 USDT worth)? (Screenshots needed)*
Staking on Sun.io
In this section, I will refer to my latest transaction on Sun.io. I staked 5.13 USDT-TRX LP token on USDT-TRX liquidy pool to earn a total of 4.57% APY. The transaction is a smart contract triggered transaction which consumed both Bandwidth and Energy. 313 Bandwidth was consumed while 89,516 Energy was consumed in the transaction. Similarly, 12.53 TRX was consumed for Energy consumed due to insufficient energy to cover the transaction. The transaction details can be seen in the screenshot below.
Obtaining LP token from Justswap
In this section, I will refer to my current transaction at the time of performing this homework task. I supplied 4 TRX and 0.32 USDT on Justswap.io to receive 5.13 USDT-TRX LP token. This transaction is also a smart contract triggered transaction which consumed both Bandwidth and Energy. 383 Bandwidth was consumed while 60,902 Energy was consumed. Similarly, 8.526 TRX was burned for energy consumed due to insufficient Energy to cover the transaction. The transaction details can be shown below.
Summary of both transactions
| Resources | Sun.io | Justswap.io |
|---|---|---|
| Transaction type | Smart contract triggered | Smart contract triggered |
| Transaction action | staked 5.13 USDT-TRX LP token | supplied 4 TRX and 0.32 USDT |
| Bandwidth consumed | 313 Bandwidth | 383 Bandwidth |
| Energy consumed | 89,516 Energy | 60,902 Energy |
| TRX Burned for energy | 12.53 | 8.526 |
From the table above, we can conclude that, obtaining LP token from Justswap.io consumes more Bandwidth, whereas staking LP tokens on Sun.io consumes more Energy. Obtaining LP token on Justswap.io consumed 383 Bandwidth, whereas, staking LP tokens on sun.io consumed 313 Bandwidth. Similarly, Staking on sun.io consumed 89,516 Energy which is 1.46 times greater than the Energy consumed in obtainingLP token from Justswap.io ( 60,902 Energy). Also, staking on sun.io burned 12.53 TRX for energy consumed while obtaining LP token on justswap.io burned 8.52 TRX for energy consumed.
How do I unstake LP token and claim mining rewards (Sun.io)?
To unstake LP tokens and claim mining rewards, the following steps can be followed;
- Visit Sun.io from Tronlink wallet as previously explained in this post.
- On Sun.io homepage, click on manage under the liquidity pool you staked your LP token. In this case, I will click on USDT-TRX liquidity pool.
- On the manage landing page, switch to Claim
- Click on max to unstake the total LP token supplied or better still, input the amount of LP token to unstake. In this case, I will click on max to unstake the 5.13 USDT-TRX LP token I staked.
- After that, click confirm and sign the transaction using your Tronlink password.
After I have successfully unstaked the 5.13 USDT-TRX I staked on Sun.io, I also claimed the 33% SUN reward which is available to be withdrawn anytime. The other remaining rewards will be claimed based on a weekly schedule as explained in this post. The screenshot below shows the LP token (USDT-TRX) unstaked returned to my Tronlink wallet and also the 33% SUN I claimed.
In conclusion, I have successfully explained my understanding of how to become a liquidity provider and obtain LP token on Justswap.io which I can stake on Sun.io to earn five different tokens. Initially, I thought Justswap.io is meant for swapping one crypto for another. All thanks to professor @sapwood for this wonderful lesson. With this innovation, we cannot only add to the growth of the DeFi community, but we will also generate mining rewards with our cryptocurrency. This is making our cryptocurrency work for us.
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