Yield Farming
Last updated
Last updated
When LPs deposit their funds to incentivize yBridge Pool and provide liquidity, they will earn the yield that consists of swap fees and liquidity mining (farming) rewards. Each pool has its specific token (only USDT or USDC are available for the time being), and the liquidity they provide is the token in that pool, hence USDT, USDC or ETH.
The mechanism of our Pool, like that of Multichain, which focuses on the provision of bridging services, is designed as a single-asset liquidity pool where users provide only one type of token (USDC/USDT/ETH for now) as liquidity so that LPs never have to be exposed to the well-known risk called impermanent loss that LPs of DEXs (such as UniSwap) are facing and the risks such as price swings/fluctuations or the likelihood of high slippage.
Due to the pool being built on the OmniChain, there are several key features you should be aware of when engaging in Yield Farming:
The gains are distributed to be included in the deposit certificate, which is like an interest-bearing token but earning from bridge fees, not from interests. Feel free to dilute my position. More TVL can generate more bridge fees and keep the APY maintaining good. A month ago, there were only 350 ETH in pools, but there are almost 590 right now, 65% MoM.
Why will yBridge have a Withholding Fee? Because yBridge is using its own OmniChain Solution to run the bridge pools on 16 EVM chains (more are coming on zkrollups). Therefore, the deposit and withdrawal of yBridge will have been completed in two transactions. To cover the gas fee used for the second transaction, yBridge will charge a withholding fee.
By doing so, all assets deposited in yBridge will be calculated together. That’s to say, 1 xyETH on Arbitrum is equal to 1 xyETH on Poylgon zkEVM. Both are equal to 1.034675 ETH (current price.)
On average, it takes around 1 mins to complete the deposit and withdrawal. When you deposit assets into yBridge, the system will send your deposit certificates such as xyUSDC, xyUSDT, and xyETH in the second transaction.
It’s simple as long as you click the withdrawal and the system will process it. If the liquidity isn’t enough, please wait for a while, and the team will inject more liquidity into it.
To deposit and provide liquidity on the yBridge you can follow these step-by-step instructions
