Liquidity Generation Event - SSL Program
The SSL Program will be used for Tren Finance's Liquidity Generation Event
Last updated
The SSL Program will be used for Tren Finance's Liquidity Generation Event
Last updated
The Single Sided Liquidity (SSL) Program is a front-end contract in which users can deposit stablecoins to pair and create/add to a liquidity pool with XY. This was designed to save users the usual hassle of having to acquire two tokens in order to create a liquidity pool. With SSL, users simply need to deposit stablecoins.
The flow for depositing stablecoin(s) into the SSL is shown below:
The flow for withdrawing stablecoin(s) from the SSL is shown below:
The Single Sided Liquidity Program offers 2x the liquidity offered by normal LPs. As an example, let's say a user has 500 of stablecoin A, and they want to create a liquidity pool of stablecoin A and B. If the user doesn't have any stablecoin B, then the user will need to sell half of their stablecoin A holdings to create a stablecoin A and B liquidity pool (assuming 50-50 LP balance), which leads to a total of $500 in liquidity (TVL).
Unlike the example above, when a user deposits 500 of stablecoin A, the SSL contract will mint 500 XY to pair with 500 stablecoin A, for a total of $1,000 in liquidity. Users also receive rewards based on this total liquidity.
Creating or adding to a liquidity pool typically takes numerous steps, with each step costing gas fees. Often times, particularly for smaller amounts of capital, the gas fee costs outweigh the rewards that a liquidity pool might offer. With SSL, users only need to take one step in depositing their stablecoin.
Single Sided Liquidity Providers receive yield in the form of TREN tokens. This TREN cannot be claimed until TREN TGE. Users can see the amount ofTREN tokens they will receive by inputting the number of stablecoins and length of time in the SSL Program through the front-end calculator.
As the deposited stablecoins are paired in a liquidity pool with XY, there is impermanent loss risk. If XY appreciates against the deposited stablecoin, the user will receive more of the deposited stablecoin than was originally deposited. If XY depreciates against the deposited stablecoin, the user will receive less of the deposited stablecoin than was originally deposited, and instead receive additional XY instead. If XY is below peg, since XY is programmed to equal 1 USD in the smart contract, the user may receive back a lower market value than the original deposited stablecoin value amount.
The following stablecoins are currently eligible:
USDT
USDC
DAI
USDe
FRAX
