DEIN LP staking
What is LP Staking?
LP Staking, also known as Liquidity Provider Staking, is a mechanism that allows users to earn rewards by providing liquidity to a decentralized exchange. In the case of DEIN, LP Staking involves staking DEIN and ETH tokens in the Uniswap v2 liquidity pool to earn additional tokens as rewards.
The LP token's full name is "ETH/DEIN Uni V2 token." However, for clarity and simplicity within this document, we will refer to it as the "LP token."
How does it work?
Obtaining LP Tokens
You can acquire LP tokens by providing liquidity to the DEIN-ETH pair on Uniswap. Alternatively, LP tokens can also be obtained through the DEIN app.
The Staking Process
Once you have LP tokens, you can stake them in the DEIN LP Staking program. This process is similar to DEIN Native Staking in terms of choosing the staking conditions:
Duration (months) | Reward Multiplier |
1 | 1 |
6 | 2 |
12 | 3 |
24 | 4 |
36 | 5 |
What are the additional risks?
Compounded Pool
While participating in DEIN LP staking, it's important to be aware of potential risks, although they are unlikely to occur. One such risk is the extremely remote possibility of the Compounded Pool being fully liquidated, which is designed as a last resort measure. However, DEIN employs various mechanisms to minimize this likelihood and prioritize efficient resource utilization.
We reccomend to read more about the Compounded Pool here:
Compounded PoolUnderstanding Impermanent Loss
Impermanent loss is a concept associated with providing liquidity in decentralized exchanges. It refers to the temporary loss of value that liquidity providers may experience due to fluctuations in the price ratio of the tokens in the liquidity pool.
Impact on DEIN LP Staking Positions:
While participating in Native DEIN LP Staking, it's important to be aware of potential risks, although they are unlikely to occur. One such risk is the extremely remote possibility of the Compounded Pool being used for Payouts, which is designed as a last resort measure. However, DEIN employs various mechanisms to minimize this likelihood and make sure only a small portion of the Native Staking is affected.
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