Why Liquidity Matters
Liquidity = Value
In short, a token price has no relevance unless there is enough liquidity to back it up. For example, a holder could have 1 million tokens each valued at $1, showing a balance of $1,000,000 in their wallet. But without enough liquidity in the pool, the holder will not be able to realise the value of the token and the actual tangible price could be $0.
Liquidity
=
Stability
For tokens listed on Uniswap, a healthy amount of liquidity is what gives the token true value. This is because the more liquidity a token has ,the less volatile the price fluctuations are when swaps are performed. Buying and selling tokens with low liquidity results in huge price changes, known as slippage; increasing liquidity limits the amount of slippage and, in turn, attracts more traders and creates tangible value for the token.
Attract Liquidity Through Unistake
Unistake makes it possible to attract the liquidity your token needs and encourages your providers to keep it flowing through customisable lock-up periods and time-based incentives. The tools provided enable you to easily set up a Unistake pool and accurately predict the amount of liquidity your chosen pair is likely to receive. Along with the ability to adjust the pool parameters to suit market conditions and your token price, Unistake makes it possible to attract liquidity providers in a precise and deliberate manner instead of relying on them to be incentivised by the Uniswap trading fees alone.
Using Unistake vs Uniswap Alone
The reason people provide liquidity on Uniswap is to receive a share of the trading fees paid by using the protocol to swap tokens. However, there are factors in being a liquidity provider, that can prevent someone from joining your pools, which Unistake was built to help alleviate. These factors are :
Unpredictable Returns
There is no reliable way to be sure of what the returns will be as the trade volume of the token can fluctuate massively based many unpredictable factors and overall market conditions.
Impermenant Loss
Losing value on the tokens provided is a very real possibility especially in new pools with low liquidity.
Share Of Pool
As the amount of liquidity providers increase, the share received of the trading fees are reduced, and a larger pool does not necessarily mean there will be more trade volume.
Providing liquidity to Uniswap through Unistake reduces and even eliminates some of the concerns of potential liquidity providers who consider joining a pool. This is achieved by the introduction of Staking Bonuses which are an additional revenue stream to the profits received from Uniswap trading fees.
Predictable Returns
Staking Bonus returns are a fixed percentage based on the amount of liquidity provided and the length of time the liquidity is in the pool.
Offset Impermanent Loss
By receiving the additional guaranteed return through Staking Bonuses, the impermanent loss can be reduced or even totally eliminated.
Share Of Pool
As pools grow and the share of trading fee profits reduce, the percentage of Staking Bonuses are not affected.
How it Works
Create A Pool
Creating a Unistake pool is free* and easy and there is no restrictions on how much or how little amount of liquidity you want to attract. The amount you will inevitably receive will be based on your terms you offer your providers.
*Other than the Ethereum GAS fees there is no cost to deploy the contracts however there may be a requirement to have an active liquidity pool with your projects token and UNISTAKE.
Set Terms
Set clear goals on the amount of liquidity you want to attract, and for how long. The returns you offer can be in your token, ETH, or both, and you can make changes to the percentages and lock-up periods to suit your liquidity requirements at any time.
Attract Liquidity
Start promoting your pools and unique gains to the whole DeFi community and even ask your supporters to donate your Staking Bonuses to help the project they love grow. All official pools are also promoted on the Unistake platform which can introduce your project and liquidity pools to new users without any marketing.
Decentralized Deployment
Any project can set up a pool via the Unistake factory contracts on Etherscan; once created, you can have your pool added to our UI by submitting your pool details. If you would like to learn more or need help setting up your pools please contact us via team@unistake.com
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