Thread by @0xcarbon

1/ The role that yield has played in the rise of #crypto is undeniable. Sustainable yield is a different story. Join us as we deep-dive into earning yield on #Carbon, and how the protocol maximizes your returns in a secure manner.

#CarbonCore

2/ Don’t let your cryptoassets sit idle. Earn passively (be it a bear or bull market) with Carbon — the DeFi protocol that puts your assets to work, so you don’t have to. There are 2 key ways to earn passively with Carbon:

⚡ Staking
🌊 Liquidity rewards

3/ Staking⚡

Carbon operates on a dPOS mechanism, rewarding stakers for securing the network. As $SWTH emissions inflate at a decreasing rate, the floating supply of SWTH reduces as development ramps up, calibrating a balance between sustainable yields & rewarding early adopters

4/ Start earning more with less 💰

By staking just one token — $SWTH, stakers receive a myriad of token rewards from trading fees of various cross-chain markets. This includes assets like $BUSD, $USDC, $ETH, $ZWAP, $OSMO, $AVA, $FLM and more 🔥👀

5/ As of now, 50% of block rewards are distributed to stakers, with the other 40% allocated to liquidity pool rewards and the final 10% contributed towards the Switcheo Development Fund for protocol development and ecosystem growth 🌿

6/ Liquidity rewards 🌊

Equipped with native LPs, being a liquidity provider on Carbon earns you passive yield in various ways, the first via maker rebates. Liquidity providers earn a cut of all trading fees from the pool, expanding liquidity providers’ pool share.

7/ Pool reward weights are deliberated and voted on by the community over regular 12-week intervals to ensure rewards are efficiently optimized for every pool. Individual pool liquidity, trading volume & liquidity utilization are taken into account when adjusting pool weights.

8/ Users can also earn from SWTH liquidity pools by committing LP tokens 🪙, with additional liquidity rewards awarded from Carbon’s block rewards (40%).

The amount of rewards received is dependent on the pool reward weights and duration the tokens were committed for.

9/ Wait, but what about impermanent loss (IL)? Will liquidity providers lose money by providing liquidity on Carbon?

ICYMI, impermanent loss occurs when the price of your tokens change compared to when you first deposited them in the pool.

10/ As traders buy and sell assets from the pool, the amount of assets in the pool change & fluctuate — The larger the change is, the bigger the loss!

Carbon adopts a bonding curve CPMM model on its native liquidity pools which helps to mitigate impermanent loss.

11/ TLDR; Carbon’s CPMM automatically adjusts the prices for each asset by keeping a constant product formula in check, an equation that does not change based on trade size/asset traded.

This way, token values do not move as much, lowering the risks of IL 😊

12/ “Money makes money. And the money that makes money makes money” — Benjamin Franklin 💭

Got some static crypto laying around? Psst! Providing liquidity on Demex pools is a great way to generate some passive income without too much effort.