Docs · Oceanpoint pools
Liquidity pools
Rewards
The liquidity pool earns a share of BST emissions. The allocation is set through governance and changes over time; see the live figures at /stats.
Liquidity pools reward people who provide BST trading liquidity on decentralized exchanges. Today there is one live liquidity pool, BST:ETH on Uniswap V2. The Oceanpoint dApp at app.oceanpoint.fi links to Uniswap to add liquidity and lets you stake the resulting liquidity provider (LP) tokens to earn BST, on top of the trading fees the Uniswap pool pays its liquidity providers.
Providing liquidity carries impermanent loss risk: if the price of BST moves against ETH, your position can be worth less than if you had simply held both tokens.
Pool mechanics
Adding liquidity and staking the LP tokens takes three steps.
Liquidity provider tokens, or LP tokens, are tokens issued to liquidity providers on a decentralized exchange (DEX) that runs an automated market maker (AMM). They record your share of the exchange's pool. The BST:ETH pool on Uniswap V2 issues UNI-V2 LP tokens.
Step 1: Deposit liquidity pool assets
Connect a wallet holding BST and ETH in equal value to the dApp. In the BST:ETH row of the liquidity pools section, use the "Add liquidity" link to open Uniswap and deposit both assets into the BST:ETH pool.
Step 2: Receive Liquidity Provider (LP) tokens representing the pool assets
When you deposit on Uniswap, it issues UNI-V2 LP tokens that represent your position in the pool. Instead of only holding them in your wallet, you can stake them on Oceanpoint to earn extra rewards in BST.
Step 3: Stake your LP tokens to earn BST
Back in the dApp, stake your UNI-V2 LP tokens in the BST:ETH liquidity pool. Your staked LP tokens earn BST rewards in proportion to your share of the pool.
To exit, unstake your LP tokens in the dApp and collect your BST rewards. You can then withdraw your BST and ETH from Uniswap with the LP tokens.
Uniswap V4 LP staking (built, not yet live)
A staking contract for Uniswap V4 liquidity positions has been built. It is not live on mainnet, and the pool it will support and its final settings are not yet published. The design:
- Positions, not LP tokens. Uniswap V4 positions are NFTs. You stake the position NFT of the supported pool directly.
- Lock and boost. When staking, you choose how many days to lock the position, within a range set for the pool (at least 2 days). Longer locks earn a higher reward boost.
- Early withdrawal penalty. You can withdraw before your lock ends, but part of the position and part of the rewards are cut, scaled to the time left on the lock and capped at 30% of each. The liquidity cut goes to a treasury; the cut rewards are burned.
- Rewards claimed with proofs. BST rewards are calculated off-chain and published as a Merkle root on-chain. You claim them with a proof, at any time and in several claims, whether your position is still staked or not.
Liquidity for POINT
Oceanpoint is preparing POINT, a planned crypto-asset on Ethereum that is not yet issued. It plans to run a liquidity reward programme for providers who lock full-range positions on a third-party venue. Larger liquidity providers can register their interest. See POINT and the liquidity engine.