Lyra Trial Liquidity Mining Program
[Note 27/09: This blog has been updated to reflect the new parameters for the liquidity mining program as described in LEAP-3]
Today we are announcing the start of a trial liquidity mining program, designed to increase the supply of sUSD on OE and enable a better experience for Lyra’s traders and liquidity providers. To get started providing liquidity, check out the docs here.
Since Lyra launched two weeks ago, over 3000 trades have been made on the $ETH market. This is a great sign that with the low fees enabled by Optimism, there is legitimate demand to trade options.
However, with only 500k liquidity available, the total volume available to trade is still very limited. So far we’ve dealt with this by limiting the maximum trade size in the dApp and setting high slippage on the market. As we build confidence in the system, it is important to move toward more realistic conditions. With our most recent expiry, we lowered slippage and removed the trade limit, leading to the entire liquidity pool being exhausted in just 72 hours. In addition many traders have also struggled to acquire sUSD on OE without incurring substantial slippage.
Fundamentally, these issues arise because the supply of sUSD on OE is low - with only around 8M circulating - and the demand to trade on Lyra is high. Recall that Lyra relies on sUSD as both a source of liquidity and a means of exchange:
- sUSD is the asset used by Lyra’s liquidity pools, providing the collateral for all options purchased.
- sUSD is Lyra’s “quote asset”, which means all options purchased and sold require the exchange of sUSD.
To help increase the supply of sUSD, the Lyra Launch Council passed LEAP-3, initiating a two and a half week trial program in which 750,000 LYRA will be available for liquidity providers in the Uniswap sUSD / DAI pool and Lyra’s ETH Market pool. There are a total of 1,000,000,000 (1 billion) LYRA tokens in existence. Liquidity providers will receive LYRA in proportion with their share of the total liquidity in each pool. The rewards earned during this program will be distributed when the LYRA token is officially launched. More information about the LYRA token will be released in the coming weeks.
Start: Monday 27 September 00:00 UTC
End: Monday 4 October 00:00 UTC
Amount: 150,000 $LYRA
Start: Monday 13 September 00:00 UTC End: Monday 27 September 00:00 UTC Amount: 375,000 $LYRA
This program is targeted at SNX stakers who can mint sUSD on OE. Those who provide liquidity in the range specified below will receive LYRA in proportion with their share of the eligible liquidity. To be eligible for rewards, liquidity must be provided with a specific minimum and maximum price. Fixing the bounds simplifies the logic for computing rewards and reduces the ability to game the program.
[OLD RANGE] Minimum Price = 0.99005 [OLD RANGE] Maximum Price = 1.2995
Please note that as of 10/11 the ranges for the liquidity mining program have been updated to:
- Minimum Price = 0.8496
- Maximum Price = 1.1503
This range corresponds to a min tick of -1630, and a max tick of 1400.
To explain why this wide range was chosen, we need to consider the dynamics of the market as well as the overall goal of the program. From a supply perspective, it is much easier for traders to acquire DAI than sUSD, since DAI can be bridged whereas sUSD must be minted at 600% c-ratio by an SNX staker. From a demand perspective, we expect traders are much more likely to acquire sUSD from this pool than DAI, since it will allow them to trade and provide liquidity in Lyra. Finally, we are not actually interested in directly increasing the supply of DAI, as it does not have any utility in Lyra
Rewards will be computed using the script located at this repository. A snapshot will be taken once every 3 hours to determine who is eligible to receive rewards for that period. A detailed technical description of the process is included in the readme of the repository.
Please note: If you remove or modify your pool position on Uniswap, you will not receive rewards for that 3 hour period.
How to provide liquidity to Uniswap sUSD/DAI
- Bridge SNX and DAI to OE using the gateway.
- Mint sUSD on OE using Synthetix’s staking dApp.
- Go to the Lyra Trading dApp ‘Pools’ page at: https://app.lyra.finance/pools/overview
- Under ‘Programs’ click into the DAI-sUSD pool
- Click ‘Add liquidity’, you will be redirected to the Uniswap
- Once on Uniswap ensure you are connected to the Optimistic Ethereum Network.
- Ensure you have selected the DAI-sUSD token pair (DAI per sUSD).
- Set the deposit to the required ranges (Min price 0.80012 and Max price 1.1996)
9. Once deposited, check your Uniswap NFT for the required ticks (-2230, 1820)
10. Once you have added liquidity, it should appear back on the Lyra pools page after ~5 minutes
11. You will receive a notification that your liquidity has been successfully added. You will now be able to monitor your position, and check your rewards from the Lyra Pools interface.
Lyra ETH Market Pool
Start: Friday 17 September 09:00 UTC
End: Friday 1 October 09:00 UTC
Amount: 375,000 $LYRA
This program is targeted at those interested in providing liquidity in Lyra’s ETH market. It begins 4 days after the Uniswap rewards, since it is necessary to first increase the supply of sUSD on OE. We will release a second post in the coming days which explains how to provide liquidity and become eligible for the rewards.
Over the coming days more information will be provided surrounding liquidity provision in the Lyra ETH Market pool. There will also be additional features in the dApp added which allow LPs to track and manage liquidity across pools. LP rewards will be distributed following the token going live, which is planned for late October.
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