Recently we have announced the launch of AllianceBlock’s very own liquidity mining product. The AllianceBlock Liquidity Mining product allows users to provide liquidity through a number of different protocols, starting with Uniswap, and stake their liquidity pool tokens for a reward in ALBT and later a potential additional reward from our strategic partners.
The objective of this article is to provide the reader with a detailed dive into our solution, introduce key concepts applied, and answer the most common questions. The article also contains a detailed step by step visual guide to introduce users to AllianceBlock Liquidity Mining User Interface.
What does Liquidity Mining mean for AllianceBlock?
At the heart of AllianceBlock is our vision to connect Traditional Finance markets (TradFi) with Decentralized and Digital Assets markets (DeFi) bringing new financial opportunities to both worlds. Such disruption, however, does not happen overnight and can be achieved only by the process of systemic innovation and gradual improvements. One of the first steps on our journey is to bring sufficient liquidity to DeFi ecosystems and prime them to accommodate transaction volumes and liquidity demands associated with global financial markets.
AllianceBlock Liquidity Mining (ABLM) product is the first of the many products to be released that will form the foundation of the AllianceBlock ecosystem. ABLM will seamlessly integrate with AllianceBlock Protocol — our blockchain-agnostic layer 2 protocol that bridges traditional and decentralized finance and automates the process of converting any digital or crypto asset into a bankable product.
What is the AllianceBlock Liquidity Mining product?
AllianceBlock Liquidity Mining (ABLM) product is a bespoke Liquidity Mining solution developed by AllianceBlock Foundation and fully audited by leading cybersecurity solution-provider, CertiK. ABLM consists of three main parts:
- User Interface — providing intuitive and easy to use graphical interface for users
- Smart Contract Suite — set of Smart Contracts providing transparent, secure, and efficient Liquidity Mining functionalities and direct integration with leading DeFi protocols
- Analytical Module — backend solution providing state-of-the-art analytical tools to further enhance Liquidity Mining experience and performance
What is the ABLM release schedule?
ABLM is a live product and as an important component of our ecosystem, it will grow, mature, and expand, new features and product dependencies will be added to provide additional utility and capability, today we are releasing only a first feature of the ABLM Pilot Program. This release will provide initial Liquidity Mining and Liquidity provisioning functionalities as well as direct initial utility to our AllianceBlock token — ALBT. In upcoming weeks we will release additional features that will build upon the solid foundation this release provides.
The full scope of the ABLM pilot program once fully released will be as follows:
- ABLM User Interface and Web3 support
- Liquidity Mining support on Uniswap
- Liquidity Mining support on Balancer
- Multi-asset liquidity pools and rewards on Balancer
- Compounded APY Liquidity Mining
- Multi-protocol and cross-protocol support (Uniswap, Balancer, Mooniswap, Bancor)
- ABLM Analytical module and support of more protocols
- Hedging against impermanent loss
- Multi-chain support
What sort of incentives will AllianceBlock provide?
AllianceBlock foundation will incentivize liquidity miners with ALBT token rewards claimable via ABLM User Interface. We have aimed to provide competitive return rates, and based on extensive market research a dynamic token economic model was designed that will augment reward rates based on underlying market conditions.
Once the multi-assets Balancer pools support is released, Liquidity Miners will be able to receive double rewards in the form of ALBT token as well as tokens of our strategic partners that have joined AllianceBlock Liquidity Mining Partnership program (more information will be released soon).
The reward, that the individual miner is entitled to, is a function of two variables:
- The share of the total liquidity pool the miner provides
- The duration for which the miner has provided liquidity for
Meaning the longer the liquidity miner mines for, and the greater its share of the liquidity pool is, the greater share of the reward pool he will be entitled to. This model incentivizes early adopters as they will be able to mine liquidity for longer and with lower competition.
The liquidity mining program will run for 6–9 months, depending on the cryptocurrency market sentiments and needs. Basic Liquidity Mining period is one month (defined as a 30 day period, not a calendar month). The rewards for a given month will be announced upfront with sufficient time reserve.
Rewards for the first Liquidity Mining period are set by the AllianceBlock foundation and are listed below, all subsequent reward allocations will be calculated dynamically based on our market model.
First Liquidity Mining Period Rewards:
For the first mining period, AllianceBlock foundation will provide 300,000 ALBT tokens per liquidity mining pair (up to 900,000 ALBT). Liquidity mining will commence on Uniswap ALBT/ETH and ALBT/USDT today and ALBT/ETH/USDC on the Balancer pair later on.
Estimated APY for the first Liquidity Mining period:
Disclaimer: Please keep in mind any APY is subject to change based on the number of people providing liquidity and staking LP tokens, as well as the volatility of the ALBT token. All numbers specified below are just estimates based on the size of liquidity pools at the time of writing and will likely change. Provided estimates are without any guarantee and are non-binding, they are listed solely for information purposes
Based on the size of current liquidity pools and ALBT token price, we project the APY for the first month of liquidity mining to be as follows:
- Uniswap ALBT-USDT 200% APY
- Uniswap ALBT-ETH 160% APY
- Balancer ALBT-USDC-ETH 480% APY (later on)
This puts the ALBT liquidity mining program among the top audited programs currently available.
Is AllianceBlock Liquidity Mining safe?
ABLM was fully developed by and for the AllianceBlock foundation, as such, we were able to ensure that safe development processes and standards were applied. Our solution is fully audited by cybersecurity solution-provider, CertiK, the leading provider of end-to-end cybersecurity solutions, the solution integrates completely with MetaMask, enabling participants to quickly and easily accrue rewards. The full security audit report by CertiK can be found here. As stated in the report, we were able to address and resolve all known security challenges and optimize our code for the best performance and highest security standard.
Our solution will be hosted and fully supported by AllianceBlock Foundation and all source codes will be published to our public repositories.
What do you need to get started?
That’s it, once you’re ready, go to lm.allianceblock.io/ to get started.
Adding liquidity to a Uniswap pool
Once you’ve arrived to the AllianceBlock Liquidity Mining Portal at lm.allianceblock.io, MetaMask will pop up and ask you with which account you want to connect to the portal. Select the one you want to use to mine liquidity and you should then be presented with the following screen:
We will start with adding liquidity to a Uniswap pool.
Click on the pool you want to add liquidity to, for now we can choose between ETH-ALBT or USDT-ALBT. Click on the plus sign on one of them (for example for the ETH-ALBT one):
A dialog should present itself:
Here you can choose the amount of liquidity you want to add, when you provide for example any amount in ETH, the amount of ALBT in this example would be automatically calculated according to the correct ratio (and vice versa).
Through the “MAX” buttons, you can add your complete holdings of one token to the liquidity pool. The number of other tokens needed through the correct ratio will be automatically calculated again:
Once you have settled on the number of tokens you want to add to the liquidity pool, you can press “Add Liquidity”. For some pools you need to “Approve” first. When this is not needed, the portal lets you skip this step, in order to save you a transaction.
After pressing “Add Liquidity”, you will see a new dialog that repeats the information so you can confirm the numbers you have entered:
Press confirm and MetaMask will pop up asking you to review and confirm the transaction:
After doing this, you will see a new kind of overview of the pool. In this overview you will see something new: “Liquidity pool tokens”:
In return for providing liquidity you receive Liquidity pool tokens (or LP tokens). You can stake these tokens in order to get rewards (for example in ALBT).
Staking your LP tokens
In order to get rewards for providing liquidity, you must stake your LP tokens. In order to do this, simply press the stake button:
A dialog will pop up asking you how much of your LP tokens you want to stake:
Simply enter the number of LP tokens you want to stake in this dialog, or press “MAX” to stake your entire LP token holdings at once.
In case you enter a number that’s higher than our actual holdings, you will receive a warning:
However, let’s press “MAX” instead and press the “Stake” button. MetaMask will pop up again asking you to confirm the transaction. Once the transaction is completed, your view will be more interesting now:
You can now see how many tokens are going to be rewarded in total, the APY and the rewards you are able to claim so far.
Please note that some of these values in these examples do not represent real world values, as these screenshots were taken from a development environment.
Additionally you have a couple of options:
- Claim your rewards through the “Claim” button
- Withdraw your stake using the “Withdraw” button (your reward will automatically be claimed)
- Add more liquidity by clicking on the plus sign
You can come back to lm.allianceblock.io/ anytime to check your rewards, claim them, withdraw your stake or to add even more liquidity to increase your stake and thus your rewards. If you don’t see your stake at work when you connect to the platform, just reconnect MetaMask to the platform again, make sure it’s the wallet you have used before and make sure that in MetaMask you have selected “Main Ethereum network” and not a test network like Ropsten, Kovan or Rinkeby.
Add additional liquidity
Click on the white area of the pool, and you will see the same dialog as in the beginning. Repeat the steps from earlier and provide the amounts of tokens you want to add additionally in exchange for LP tokens. Once completed, your view will look like this:
You can now stake your newly obtained additional LP tokens for extra rewards (as before), claim your current rewards (keep on reading) or withdraw your rewards (keep on reading) in order to increase your amount of LP tokens.
Claiming your rewards
As you can see, we are eligible to claim some ALBT as a reward for staking our LP tokens. So let’s press the “Claim” button. Once more, MetaMask will pop up to ask you to confirm the transaction. Good news! Once the transaction has completed, you will immediately have the rewarded tokens in your wallet!
Withdrawing your stake
If you click the “Withdraw” button, you will no longer stake your LP tokens. Don’t worry, if you still have unclaimed tokens as reward for your staking, they will be claimed and sent to your wallet automatically, we will not leave you hanging!
Once you have clicked the “Withdraw” button, MetaMask will pop up as always, awaiting your confirmation.
After withdrawing your stake, you will see that the total amount of LP tokens you are holding have now increased again:
Please note: before removing liquidity, you need to have more than 0 LP tokens available (unstaked). If you have 0 unstaked LP tokens, you will first need to withdraw your staked LP tokens using the Withdraw button (see previous chapter). This is because you can't remove liquidity which you are currently staking; you will need to stop staking them (withdraw) first.
Once you believe you are done with staking and you want to get your tokens back from the liquidity pool, you can click “Remove”. A new dialog will appear:
You can choose the amount of LP-tokens you want to exchange for tokens from the liquidity pool.
Press “Confirm” to finalize your decision. You will get a transaction for each token in the pool. In this case two: one for ALBT and one for ETH.
AllianceBlock is building the first globally compliant decentralized capital market. The AllianceBlock Protocol is a decentralised, blockchain-agnostic layer 2 that automates the process of converting any digital or crypto asset into a bankable product.
Incubated by three of Europe’s most prestigious incubators: Station F, L39, and Kickstart Innovation in Zurich, and led by a heavily experienced team of ex-JP Morgan, Barclays, BNP Paribas, Goldman Sachs investment bankers, and quants, AllianceBlock is on the path to disrupt the $100 trillion securities market with its state-of-the-art and globally compliant decentralized capital market.
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