Adressing the liquidity issues on Sovryn Trading

Hi fellow Sovryns!
2 days ago I opened a 2x long on trading to test the trading.
My position opened approximately $2000 higher than the oracle price. I reckon this is because most on the platform are long, and there is not much liquidity. Although we are at an early stage, obviously this needs to be solved to achieve functionality of the platform.

I posted this on the discord without feedback, so now I’m posting it here along with thoughts on possible solutions.

TL;DR: show us the gains for liquidity provision, make the gains great, tell us how to do it and emphasize that it is safe.

First is to make clear what the returns are for liquidity providing, and how one goes about it. Right now it isn’t clear to me; the information, if it exists, is not readily available. I actually looked into it because I wanted to to LP, if the gains were good, but it didn’t seem operable due to lack of info, so I figured I should wait.
So, make it clear that users are invited to provide liquidity, and make the gains + procedure easy to see and understand.

Talking about gains, I propose that the APY starts high.
This is the classic DeFi approach for good reason. It serves to attract liquidity fast, which is important because the platform needs that liquidity to get up and running. High APY for early liquidity incentivizes people to do LP sooner rather than later, which leverages the process. So high initial APY = faster acquisition of liquidity = faster development.
Secondly, I believe it is also justifiable to the liquidity providers, as the further the protocol is developed, the smaller the risk for providing liquidity to it. After all, although we have the Immunefi bounty, we don’t know if the critical error is just undiscovered yet, since the bounty is still just some 3 weeks old.
In summary: higher APY for early users = attracts liquidity faster + rewards risk of doing LP in an early phase. High APY in general = attracts liquidity providers

Third and final, I believe that we should promote that the platform is indeed safe, perhaps with a quick article about the results of the first 3 weeks of Immunefi bounty, which to my understanding didn’t find any major bugs. Thus we could make an article with ‘Sovryn is safe’ and ‘Great rewards for providing early liquidity’ all in one and push that.

Concluding it all:
Make it clear that liquidity is wanted + what the returns are + how-to.
Make the rewards attractive, potentially with a high starting apy that then falls as more liquidity enters
Make it clear that Sovryn is a safe place to put your assets to work through liquidity providing.

Stay Sovryn you lovely people!

  • Alykz Alex / K :slight_smile:



It would be also not bad if some % of fee would be locked in LP as well.

I would propose that there would LP providers tiers would be made and rewarded with uniqe NFT’s. Higher tier more limited amount of NFT. Top 1 LP - 1 legendary NFT. Additional NFT drops for LP providers.

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An other solution would be to sell NFT that could increase your APY power.
They do that on Bakeryswap → Gamification for example

People buy these NFT to increase their rewards while being in LP or by staking.
Once bought the NFT could be sold by the buyer on some secondary market.
This would increase demand (has having it first is the cheapest way) and gives some liquidity for Sovryn while bought on primary market.

The price right now for these NFTs on Bakeryswap are between 12k and 120k USDT.
And your annual ROI is increased between 40 and 225%

This might be a good easy way to increase liquidity :grinning:

I hope this will help you find a solution

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Maybe some additional % of transactions fee could be also provided to liquidity providers.

Thanks all. Liquidity is currently the HIGHEST priority and we are working on many fronts to get the pieces in place. M<any of the things you mentioned are being worked on. Its a more complicated issue than I am able to go into here - but you are absolutely right about its importance and it will get fixed.

Stay tuned. Updaters and explanations coming soon.


Yes, I also tested it some time ago. It only takes a dozen dollars to increase a few percentage points. There is basically no liquidity. This question is currently the most important

Hello @AlykzAlex I saw your post 2 weeks ago, sadly is only today that I have some answers to you.

1.- Returns for Liquidity Providers: It all depends on statistics, the amount of transactions per day the AMM process. The UI already gives that numbers.
2.- Returns for lenders (which is not the same as LPs): Depends on the demand on lending pools, and the formula of active rates are indicated in the of the smart contracts repo. On top of that, to get passive rates, take into accon that 10% of that interest is going to a insurance fund, and 1% is for Sovryn platform, but it is likely I must do some further research.
3.- The only way to control the API is through that 1% sovryn platform collects… imho, not a good idea to rise that % just to attract liquidity providers, coz that disuade users to use the platform, which is what provides our earnings. Is a very delcate equilibrium. The rest of variables depends on how often users use the AMMs, borrow money or open margin trades.
4.- I agree with you regarding the pursue of safty, but that’s already happening… having Immunefy not found any bugs is a good signal. Take a look into my proposal on how users can help us to find issues/problema in our code/platform/UX.
5.- If you need any help with that article about the safety of our platform, just let me know :sunglasses: