Long-term investing: boosted rewards at Adamant Finance
If you’ve been following this space you know I love Adamant Finance. Their profit-sharing model is one of my favorite in Defi. When you start using Adamant for yield optimizing you’re investing in a great development team and protocol. With their latest update, you’re now able to lock in your ADDY/ETH liquidity for up to 3 years and receive boosted rewards.
What does locking liquidity mean?
With the latest update at Adamant, you are able to stake and lock your ADDY/ETH liquidity pool tokens. When you lock you are able to choose anywhere from 7 to 1095 days (3 years) and receive boosted rewards for doing so. These rewards are a multiplier (from 1.28% for one week up to 300% for locking the max 3 years) on the already high APR (at the time the APR on your original investment is 738%).
Locking means you will not be able to withdraw that liquidity for that time period.
Liquidity providers that stake their ADDY/ETH tokens are rewarded by Adamant with additional ADDY that they can then claim and vest (sharing in the protocols profits) or withdraw immediately at a 50% penalty. (See the article here for more details on Adamant’s reward structure and how claiming ADDY works.)
Why should I lock my liquidity at Adamant?
Liquidity providers that want exposure to ETH and ADDY for the long-term (anywhere from a week to 3 years) can lock their LP tokens. The reward for doing so is a boosted APR. You get more ADDY for the same investment.
If you start doing the math on that APR you quickly realize that your initial investment with a 3x boost can more than pay for itself in the first month. (Example: at 1321.14% APR, in 30 days I will receive ~108% of my initial investment in ADDY rewards that can then be claimed and vested.)
Note: the APR will change as more ADDY/ETH is locked and the reward is spread across lockers.
Why is Adamant rewarding locking?
There seem to be a couple of reasons that the team would reward ADDY/ETH locking.
- It provides necessary liquidity for those that want to invest in the protocol.
- Locking increases the price stability of ADDY as it allows supporters to lock in their rewards, and encourages HODLING of the token.
- The new lock mechanism is a reward for long-term supporters of the project, rewarding those who are willing to invest in it.
How can I lock my liquidity?
Locking your ADDY/ETH liquidity is easy. Start by creating the token pair at Quickswap. You can learn specifics about swapping tokens and creating a liquidity pool for Adamant here.
Once you have liquidity at Quickswap you can stake and lock it at Adamant in the ADDY/ETH pool.
You will need to check to “Stake locked” and then enter the number of days you want to do so. You will see the multiplier change as you enter the number of days you want to lock. (You can also leave the box unchecked to stake it without any lock.)
You can lock for up to 3 years which is what I choose to do and in turn receive a 3x multiplier!
Once you have locked your ADDY/ETH LP you can claim and vest the rewards. I recommend doing so at least daily to get the best returns. Claiming gets you WMATIC rewards as your ADDY vests.
What risks are there?
As with every investment in DeFi there are risks when locking your ADDY/ETH.
- You will have some opportunity costs as the LP is locked and you cannot withdraw it to sell, trade.
- If the price of ADDY or ETH changes you may see a decrease in the LP value.
- Should there be an issue at Adamant you won’t be able to withdraw unless an emergency withdrawal is enabled by the team.
I’d encourage folks, as always, to only invest what they are comfortable with and to do their own research. As for me, I believe strongly in the long-term success of Adamant and that the value of the project will only grow as time goes on.
About Adamant Finance
Adamant Finance was the first yield optimizer on Polygon, and has grown to a TVL of over $578 million at the time of writing. Their unique profit-sharing model brings bigger yields to users.
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About Revolutionary Spaces
At Revolutionary Spaces I bring the latest news, discussion, and how-tos on the DeFi world, especially on Polygon. I love helping folks out and can usually be found on the Discords for Adamant Vaults, the Qi DAO, and Balancer Protocol. I am currently looking for opportunities in product management, documentation or technical writing, and community management in the DeFi space. Reach out!
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