Liquidity rewards program v2

Provide liquidity. Provide privacy.

pDEX is the only exchange that protects user privacy, but without liquidity, what Incognito can do is limited. More liquidity = more privacy, for more people. It’s that simple.

Provide liquidity to pDEX. Put your PRV where it matters.

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Earn rewards on any PRV pair

The beloved liquidity rewards program just got an upgrade. As the world’s privacy currency, PRV makes completely anonymous trades of any cryptocurrency possible.

So from June 1, 2020, you’ll earn rewards on every PRV pair.

How do I become a liquidity provider?

All you need to do is provide even liquidity to both sides of the pair – say PRV and BTC. For example – if you want to contribute $20,000 in liquidity, you’d have to contribute $10,000 of PRV and $10,000 of BTC.

Click here to expand instructions

1. Open your Incognito wallet to access the Invest

Don’t have a wallet yet?

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2. Deposit funds to your trading account

On your home screen, tap the ‘Provide’ icon. This will open up the Provide.

Then tap deposit.

Next, choose which account you’d like to deposit funds from.

Select the account, enter the amount, and tap Deposit.

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Do it for the second token too (in our case its BTC, in your case can be any)
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That’s it. Now you have funds in your trading account.

3. Add liquidity from your trading funds

Tap ‘Invest’ at the top of your screen, and set the amount you want to provide. Then tap ‘Add liquidity’ at the bottom of your screen.

:exclamation: Double-check both Tokens and Amounts you are going to add liquidity for.

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Success!

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From the minute your liquidity contribution is made, you’ll start earning rewards. Rewards will be automatically deposited to your pDEX account every Monday.

Thanks for being a liquidity provider!

Program details

Starting June 1, 2020, this is how liquidity rewards will be calculated:

  • Fixed rewards pool every month
  • Every PRV in any liquidity pool qualifies for rewards
  • Distribution continues every Monday 08:00 UTC (until Invest v2 is live)

The following diagram details the distribution of rewards over the coming months.

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Want to estimate your ROI? Play with numbers here.

Figures above are dependent on demand. Rewards may increase or decrease according to the amount of funds in liquidity pools.

Here’s how to calculate your rewards

Let’s say you’ve contributed 10,000 PRV and equivalent in 6,700 USDT into liquidity pools. Total PRV in liquidity pools are 2,000,000 PRV

In June, 55,000 PRV will be distributed to liquidity providers. That’s you! Your contribution is 1/200 (10,000/2,000,000) of the total pool.

June reward = 55,000 PRV/$2,000,000 * 10,000 = 275 PRV

Let’s take a broader look.

Month Estimated reward (PRV) Estimated reward (USD) Estimated APR (PRV only) Estimated APR (whole pair)
June 275.0 $184.25 33.00% 16.50%
July 275.0 $184.25 33.00% 16.50%
August 300.0 $201.00 36.00% 18.00%
September 300.0 $201.00 36.00% 18.00%
October 325.0 $217.75 39.00% 19.50%

Rewards are paid out from the Incognito DAO, a self-sustaining organization dedicated to funding development of the Incognito ecosystem.

Ready to start earning rewards?

Just open pDEX from your Incognito app.

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FAQ

What is the pDEX?

pDEX is the first completely private decentralized exchange. Powered by an automated market making mechanism.

Technical overview >

How the pDEX works >

What is the minimum or maximum amount of liquidity I can provide?

There are no restrictions. You can provide any amount of liquidity.

What is the lock-up period?

There isn’t any. You can withdraw your liquidity contribution at any time.

How often and how will I get my rewards?

Reward will be automatically distributed every Monday to your pDEX account. Note that if you remove liquidity on a different day, you will be paid on the following Monday.

How is the reward calculated?

Your rewards are calculated based on the amount of liquidity contributed, and the length of time your funds are in the pool.

Which currencies will I get paid in?

All rewards will be paid in PRV based on the pDEX market rate on the day of distribution.

For example, let’s say your reward is 8 USDT. The equivalent amount in PRV will be taken from the USDT/PRV pair on pDEX. So if PRV price on the distribution day is $0.45, you will get 17.7 PRV.

How can I check my liquidity balances ?

We work on building a proper dashboard for liquidity providers, meanwhile here is guide how you can check your liquidity balances.

When I use my private keys and restore my accounts, do I restore liquidity also?

Yes. When you restore your wallet from different device you will get access to your liquidity pools.

If you have any further questions, feel free to post a reply to this topic, or DM @andrey

Further reading

59 Likes

Difficult :frowning: @andrey
If I invest 1000 USD how much will I make a profit per week?

11 Likes

I guess, you invest total amout $1000. Meaning in liquidity are $500 & 561.87 prv ( current price ).

You get around 55,000/1,600,000*561.87 = 19,31 prv per month.

Assume: total prv pool is 1,600,000

5 Likes

Thanks @Oerang_Badoey for helping to clarify it.

@oppo hopefully @Oerang_Badoey post helps. Of course, earning part is important for everyone, but Instead of focusing on quick earnings, we want to focus altogether on growing Incognito DEX which is the only privacy-focused alternative decentralized exchange.

16 Likes

This is great to hear!

What are the rates of earnings going to be on each pair? Or are the rewards only paid for the half that is PRV?

For example providing liquidity for PRV <> BAT would provide what rate of rewards for both sides of the pair?

3 Likes

@Jared, good question. I couldn’t figure out if both pairs earn rewards either.

An explanation in the calculator worksheet seems to imply that both coins in the pair earn rewards: “[E]nter the PRV equivalent of liquidity you want to add to the pDEX.” The phrase “PRV equivalent of liquidity” especially makes me think you earn for the entire pair, but clarification on this point is very welcome.

2 Likes

Hey @Jared, the reward will be calculated only on the PRV part.

If you set up a pair PRV <> BAT, the reward will be calculated only on PRV part.

Hey @Gold, I would love to simplified explanation, open to any suggestions, how to improve it ?

2 Likes

@andrey, thanks for asking!

I think you have done a good job explaining it and have given good examples on how to calculate earnings. I just couldn’t tell whether or not both halves of the pair earn rewards.

To clear up this confusion, in the main post you could add a sentence explaining which half of the pair is eligible. Suggestion in bold below.

How do I become a liquidity provider?

All you need to do is provide even liquidity to both sides of the pair – say PRV and BTC. For example – if you want to contribute $20,000 in liquidity, you’d have to contribute $10,000 of PRV and $10,000 of BTC. You would then earn rewards on the PRV half of the pair.

Also, under the FAQ, you could add a similar sentence.

How is the reward calculated?

Your rewards are calculated based on the amount of liquidity contributed, and the length of time your funds are in the pool. Only the PRV half of the pair is used to calculate earnings.

Finally, in the calculator sheet, I think a small revision will clear up the last little bit that could cause confusion.

In the yellow highlighted box, enter the amount of PRV liquidity you want to add to the pDEX. Add only the PRV half of your pairs.

I think just a few small touches like this would really help.

Are there any other spots in the explanation you would like to address? I’d be happy to take a look for you. In general, I do think the post is strong.

3 Likes

Does this mean we are no longer receiving the 8.5% for ETH or 8% for BTC, etc?

1 Like

Yes. But now you can add other tokens to the pDEX. It’s not limited by BTC or ETH anymore.

5 Likes

I invested based on returns from these major coins. It gave me reason to add those pairs. So, incentive to add liquidity is now what % for PRV alone?

You get around 32% APR when staking only PRV, versus 62% (has this changed?) when paired with an equal amount of another cryptocurrency.

Is there a chart that compares what kind of return you would get converting the other crypto into PRV and just sticking it all in the staking section?

So, why would I do $100 PRV/$100BTC.
Instead of just the $200/ PRV staking?

4 Likes

@Jerry_Watson,
the answer is simple. If everyone puts PRV on staking, the liquidity pool will be = zero and no one will be able to execute any trade.

This why I keep repeating, that pDEX is the heart of Incognito ecosystem and liquidity pools - circulation system.

Every PRV holder should switch focus from maximizing profit to maximizing the project’s health.

3 Likes

I guess if you think putting all your money in PRV is more risky, at least when you remove your liquidity, you have a chance to get some of your crypto back. But 62% on half your investment is less then 32% APR on your full investment, so I feel like this incentives people to stop providing liquidity. Pair that with “impermanent loses”, you don’t seem like your going to be winning for providing liquidity to the network. Sure, it’s better for the network if you do, but it’s a mistake to assume people would do that for the health of the network. Some people would, but equally some people wont. At the end of the day people are greedy. If you want people to provide there has to be more of an incentive.

The incentives don’t necessary have to be short term profits, for example, before I suggested voting rights

You could also provide liquidity pool providers better PRV staking rates. The more your providing liquidity for the network, the more you can earn from just staking PRV. Even if it’s just a small increase.

Without extra incentives, I think people care more about the opportunity to make money. I wouldn’t be surprised if people started taking out their liquidity. I’m not personally, cause honestly I could care less about losing my money, but others aren’t so lenient. I honestly don’t see this turning out good for the liquidity of the network.

5 Likes

Unfortunately, I strongly agree with this.

Liquidity providers need an economic incentive to provide liquidity while accounting for the relative risk profile vs just staking PRV or hosting a validator node.

For one, providing liquidity should have a significantly higher net reward than staking because:

  1. For the DEX to be successful we need liquidity, and there isn’t enough right now to encourage large transactors to interact with PRV.
  2. Staking rewards are paid continuously and available at any time for withdrawal.

These two factors outweigh the additional risk taken on by (i.e. downside of) staking vs providing liquidity which is that you have to have all your available funds in PRV to stake instead of providing liquidity.

How you structure the higher reward for providing liquidity is flexible, it could be as simple as sticking to only paying liquidity providers based on the PRV half, but choosing a total reward amount that is high enough such that when the targeted amount of liquidity is hit, the net reward is higher than staking.

I’d also like to argue that certain liquidity pools are more important that others e.g. PRV/pUSDT vs PRV/BAT, so it’s a good idea to have a separate reward pool per pair so that you can incentivize the more important pools correctly.

For these two reasons, I think that this change to the liquidity provider incentives is a step backward and needs to be tweaked.

Is 1.6m PRV the current amount of PRV in the entire liquidity pool across all pairs? Is this figure available on any of the dashboards/tools? If so, I can do a couple calculations and make suggestions if needed.

2 Likes

I don’t like to say this, but voluntary risk for the benefit of the greater good never really works out. People care mostly about themselves and their family. It’s basic human nature.

I definitely think the Liquidity system needs to change if Incognito is to succeed. Right now I see providing liquidity as a detriment to the value I store. The risk seems far greater then just staking PRV.

The only reason I mention this, is because I really do want Incognito to succeed.
A quick fix might be lowering the staking rewards even more, but that might end up messing up PRV in general. You have to make sure more people stake then the PRV being generated.

I would also like to mention that this affects anyone who is providing liquidity increasing their risk of value loss. All liquidity providers should be aware of the change. I also feel like even though we don’t have a voting system in place yet, a simple poll would have been beneficial. If there was a reason things needed to be changed, their are forums to bounce better ideas.

I’m just trying to be critical to help move Incognito move in a good direction. The last thing I want is for Incognito to fail.

5 Likes

Exactly.
I like your idea about if you provide “x” amount to liquidity you get a slightly higher APY for staking. A type of tiered structure approach.
It could be a certain percentage of what a person stakes will be what is needed to maintain that tiered earning. If they have a lot in staking and none in liquidity, they have the lowest APY available for staking, etc.?

3 Likes

I think that would be a good direction. Massive PRV holders would now have good incentive to provide liquidity to the pools. These are the people who are most committed to the network and should honestly get the most rewards. All their PRV is going to be locked up anyways, might as well have them hosting liquidity instead of incentivizing them to stake it all.

Based on the amount of total percentage of shares you own, your staking rewards increase. That way, if your providing for a less risky pool, your staking rewards go up slightly, while alternatively if you provide for a more risky pool, your staking rewards go up more significantly. People can invest and diversify in the liquidity pools they want, and fine tune the extra rewards from staking.

2 Likes