You can now earn UTU by providing liquidity to the UTU-ETH and USDC-UTU pools on Uniswap.
Note 1: This post has been updated on November 6, 2020 to reflect that the USDC-UTU Uniswap pool has been made eligible for UTU liquidity mining rewards.
Note 2: This post has been updated on December 10, 2020 to reflect a change in rewards level.
Note 3: We are extending this program until at least January 31, 2021.
Note 4: As of January 31, 2021, the liquidity mining program has been put on pause.
Hello UTU Trust Guardians!
Read on for details about the goals of the program, the rewards structure, and how to add liquidity to our Uniswap pool.
Overview of the UTU Liquidity Mining program
The goals of the UTU Liquidity Mining program are to:
- Increase the liquidity of UTU coin — we understand the importance of strong liquidity to provide availability of and proper trade execution for UTU.
- Distribute UTU coin for governance — we want to increase the communities’ participation in future governance of the UTU protocol.
We will use two Uniswap pools for our liquidity mining program:
- UTU-ETH: https://info.uniswap.org/pair/0x8d01c6e109c3db63f7aa43404157b274cf18ffd8
- USDC-UTU: https://info.uniswap.org/pair/0x34bc4e6b6997af1cf66e7899849bd3e288827890
At the moment, there is no set timeline for how long liquidity mining will last. We will run this program until January 31, 2021, continually assess its effectiveness over that timespan, obtain feedback from the community, and make changes if necessary.
All right, now onto the rewards!
Rewards and distribution information
Here is the key information you need to know about the rewards structure:
- Phase 1 of the program will run until January 31, 2021, with 5 UTU being rewarded (changed from 15) per Ethereum block, which equates to approximately 32500 UTU per day (the number of Ethereum blocks mined per day varies).
- These rewards will be split pro-rata based on your share of the total liquidity provided at each block (excluding the liquidity provided by the UTU team and One Block Capital) across both pools.
- Rewards for the UTU-ETH pool started accruing October 31, 05:00 UTC. Rewards for the USDC-UTU pool will begin accruing November 6, 20:00 UTC.
- UTU reward tokens will be distributed approximately every 20 days — on November 20, December 10, and December 30.
The Annual Percentage Rate (APR) that you earn depends on how much liquidity you provide compared to others, total liquidity provided, and token price.
Basically, the earlier you get in, the better, as there may be fewer liquidity providers at that time.
But with more liquidity providers and higher total liquidity, the APR you will earn will be lower. Keep in mind that higher liquidity helps stabilize the price of UTU, though.
From our models, we estimate that the APR as of December 10 is around 120%. This of course will decrease as more people provide liquidity.
Please note that if you provide liquidity, there is a risk of impermanent loss when the price of these assets fluctuate. Please read this article to learn more about impermanent loss and the risks associated with providing liquidity.
As we mentioned earlier, we may adjust the reward amount, program duration, and other variables based on community feedback, participation rate, and impact to token prices.
When we initially set the overall budget for UTU protocol, we did not plan on running a liquidity mining program and thus did not have any tokens earmarked for it. So in order to fund this program, a few of our investors and strategic partners, such as Deep Ventures, Ape Unit, Luka Sucic, and others have agreed to lend us tokens to fund the program rewards. We appreciate their support!
How to participate in the UTU Liquidity Mining program
In order to receive UTU liquidity mining rewards, you need to add liquidity to the UTU-ETH or USDC-UTU pools on Uniswap. You will need to add equal amounts of UTU and the other asset (ETH or USDC, depending on which pool you contribute to), so make sure you have enough of both assets in your wallet.
Here are the steps to add liquidity to our Uniswap pools:
- Navigate to the UTU-ETH or USDC-UTU pool. In the upper right corner, click the “Add liquidity” button. This will open up a new tab.
2. In the upper right corner of the new tab, click on “Connect to a wallet”.
3. Select the wallet of your choice and connect it to Uniswap.
4. After you’ve connected your wallet, in the “Add Liquidity” box, enter the amount of UTU or ETH you would like to contribute. The amount of the other asset will auto-populate based on what you input.
5. Click on the “Approve UTU” button. Confirm the transaction in your ETH wallet.
6. Once the transaction goes through, you’ll see some approval notifications on screen, and the “Add Liquidity” box will have a big “Supply” button. Click that button.
7. A modal will pop up with information about the amount of pool tokens you’ll receive and other details. Click “Confirm Supply”.
8. Uniswap will submit your transaction to the Ethereum network. Once that transaction gets confirmed, you’ll see an approval notification. And you’re all done!
We are super excited to get our liquidity mining program going!
We hope you can contribute liquidity to earn UTU rewards and eventually participate in the governance of the UTU protocol.
Please let us know if you have any questions, and we can’t wait to start giving you your rewards soon!