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How to connect multiple wallets on Krystal iOS App
Managing your crypto assets securely and efficiently is crucial. Krystal iOS App makes it easy to connect to a new wallet, allowing seamless liquidity provision. Follow this guide to connect your preferred wallet and start leveraging the full power of Krystal’s DeFi ecosystem.
Step 1: Open the wallet page and tap the wallet icon
Upon opening the Krystal iOS App, navigate to the Wallet page. In the top-left corner, you’ll see a wallet icon, tap on it to access your wallet settings.
Step 2: Add a New Wallet
Once in the wallet settings, click the plus button (+) to begin the process of adding a new wallet.
Step 3: Select “Import existing wallet”
If you already have a wallet you want to use with Krystal, select “Import existing wallet” from the options available.
Step 4: Choose “Connect Wallet”
You will be presented with multiple options to import your wallet. Select “Connect Wallet” to proceed with linking an external wallet.
Step 5: Select your preferred wallet
Krystal iOS App supports multiple top-tier wallets. Choose the wallet you want to connect, such as Metamask, Trust Wallet, and more.
Step 6: Confirm the connection
Once you’ve selected your wallet, a confirmation request will appear in the external wallet app. Approve the connection request to securely link your wallet to Krystal iOS App.
Step 7: Name your wallet and finalize setup
To easily identify your wallet in Krystal iOS App, enter a custom wallet name and confirm.
Congratulations! Your wallet is now connected, and you can start executing transaction, providing liquidity, and more. Whenever you make a transaction, confirm it directly through your connected wallet.
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How to use Zap In on the Krystal Wallet App
With Krystal Wallet App, LPers no longer have to keep checking their positions manually or worry about missing crucial market movements. It also simplifies liquidity provision by offering the Zap In feature, allowing users to add liquidity to pools with just a few taps.
This step-by-step tutorial will guide you through the entire process.
Step 1: Choose your preferred pool
To begin providing liquidity, open the Krystal Wallet and navigate to the Earn tab. Before choosing a pool, you must first select the blockchain network on which you wish to provide liquidity.
Krystal Wallet supports multiple networks, including Ethereum, Solana, and more. Ensure that you have the appropriate tokens available on your chosen network to proceed seamlessly.
Once you’ve selected a network, browse through the Hot Pools section, where you’ll find a curated list of trending liquidity pools. These pools are categorized based on various metrics to help you make an informed decision.
To refine your search, you can use filters to sort pools based on:
- Platform: Choose pools from specific DEXs such as Raydium, Uniswap, or others.
- APR: Compare potential earnings based on historical yield rates.
- Trading Volume: Assess pools with high transaction activity, indicating better liquidity.
- TVL: Check the total capital committed to a pool, which can indicate its stability and attractiveness.
If you have a particular liquidity pool in mind, Krystal allows you to search directly by:
- Token Pair: Enter the names or symbols of the tokens involved in the pool (e.g., SOL/USDC).
- Token Address: Input the contract address of a specific token to locate relevant pools.
- Pool Address: If you know the exact contract address of a liquidity pool, you can enter it for direct access.
After reviewing your options and selecting a pool that aligns with your liquidity provisioning strategy, simply tap on it to proceed to the next step.
Step 2: Access the Zap In feature
After selecting your preferred pool, you will see an option labeled Zap In. Tap the Zap In button to enter the Add Liquidity screen, where you can customize your liquidity contribution.
Step 3: Choose your position range
When adding liquidity, it’s crucial to select a Position Range that aligns with your LPing goals. Our Wallet App offers many popular range options:
- Narrow (-5%, 5%): A tighter range for those who want to maximize fees but may need to rebalance frequently.
- Wide (-30%, 30%): A more flexible range, reducing the need for frequent adjustments.
- Full Range: Covers the entire possible range but may have lower returns.
Besides, you can also manually adjust the Min Price and Max Price to set a custom range that better suits your strategy.
Step 4: Choose deposit token and amount
The next step is to determine which token you will deposit and how much you wish to contribute. Unlike traditional liquidity deposits, Zap In allows you to deposit a single token instead of manually swapping and balancing both assets in a liquidity pair.
Once you input the deposit amount, the app will take a few seconds to process and retrieve relevant deposit details. During this time, carefully check the output tokens – the actual tokens that will be deposited into the liquidity pool.
Step 5: Review important parameters
After selecting the token and entering the deposit amount, you should carefully review:
- Swap Slippage: This defines the acceptable percentage difference between the expected and executed price of the swap.
- Deposit Slippage: This ensures that your deposit executes without significantly impacting the pool’s price.
- Network Fees (Gas Fees): If fees are too high, you might want to wait for lower congestion periods to execute your deposit.
Before proceeding, you will see an option to enable or disable Auto Rebalance. In this guide, we will disable Auto Rebalance to maintain manual control over liquidity allocation. We will discuss this feature in more detail in the next tutorial.
Step 6: Confirm and monitor your position
After reviewing all the key parameters and ensuring everything is set correctly, the final step is to confirm your deposit and track your liquidity position in the pool. Once you are satisfied with the details, tap “Zap In” to proceed.
This will take you to the Add Liquidity Summary screen, where you can perform a final verification of your deposit information.Here, you should carefully review the following details:
- Token Input & Input Amount: The token you are depositing and the exact amount you are contributing.
- Deposit Tokens & Deposit Amounts: If using Zap In, ensure that the converted tokens match the liquidity pool’s requirements
- Position Range (Min Price – Max Price): If providing liquidity in a concentrated liquidity model, verify the price range in which your liquidity will be active.
- Swap Slippage, Deposit Slippage, and Network Fees: These determine execution success, potential price impact, and transaction costs.
If necessary, you can adjust Swap Slippage, Deposit Slippage, and Network Fees by tapping directly on their values. Modifying these settings ensures your transaction aligns with your risk tolerance and current market conditions.
Step 7: Check transaction status
Once you’ve confirmed your deposit, the next step is to track the status of your transaction to ensure it is successfully processed on the blockchain.
You can tap on the TxHash (Transaction Hash) or select “Open Explorer” to view the transaction details on a blockchain explorer, such as Etherscan, Solscan, or relevant network scanners.
If the transaction is still pending for an extended period, you may need to check network congestion or consider increasing gas fees for faster execution.
Once the transaction is successfully completed, tap the “View Position” button to check your position details on Krystal DeFi.
Alternatively, navigate to the Wallet tab, select “Liquidity”, and tap on your Position to access more details. On the Position Detail screen, you can find essential information about your liquidity position, including: Position Value, Profit & Loss (PnL), Pool Metrics, etc.
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Managing your LP positions has never been such easy with Krystal Wallet
With Krystal Mobile App, Liquidity Providers no longer have to keep checking their positions manually or worry about missing crucial market movements.
Now, you’ll always stay ahead with real-time notifications that alert you whenever your LPing positions move out of range or come back into range, so you can react instantly – anytime, anywhere!
Try now here:
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Krystal’s Auto Rebalance officially supports Solana
Since Krystal first launched support for Solana, we’ve received countless requests from our community asking, “When will Auto Rebalance be available on Solana?”
Well, the moment you’ve been waiting for is finally here! Excited to announce that Krystal Auto Rebalance is officially landing on Solana!
More details below.
EVM vs. Solana: Key difference
As you may know, our Auto Rebalance was previously introduced on EVM chains, many users are familiar with its benefits. Now that we’re rolling out Auto Rebalance on Solana, you might wonder how the experience differs between 2 ecosystems.
While the core functionality remains consistent, there are a few important distinctions worth highlighting, including architecture and user experience. For example, Solana’s design—especially its transaction size limit—makes it harder to combine multiple liquidity instructions (like swapping tokens and depositing) into one transaction. Additionally, unlike Ethereum’s
setApprovalForAllthat lets an external party auto-rebalance on a user’s behalf, Solana requires explicit authorization from the account’s signers for any state changes.To address this challenge, Krystal has developed a Vault System. When a user activate Auto Rebalance on Solana, their position is transferred to a dedicated vault. This vault is directly linked to their address, allowing them to easily monitor and manage their positions through Krystal’s dashboard.
Benefits of using Krystal Auto Rebalance on Solana
By combining Krystal’s Auto Rebalance with Solana’s high-speed and low-cost network, users gain access to a more profitable DeFi experience.
Here’s why Krystal Auto Rebalance on Solana stands out:
- Leveraging our experience with auto rebalancing on Ethereum, we are bringing the full benefits of automation to Solana. Users can set up trigger conditions, customize new price range, choose whether to compose position, decide if rebalancing is recurring or one-time, and more—helping them create advanced strategies to handle any market conditions.
- Transaction cost: One of Solana’s standout features is its low transaction fees, which are cheaper than most EVM chains. This cost efficiency allows users to execute frequent Auto Rebalance adjustments without worrying about high gas fees eating into their profits. More rebalancing at a lower cost = more opportunities for earnings.
- Minimize risks when LPing: Market volatility can hurt unprepared LPers. Our Auto Rebalance keeps your liquidity positions optimized by automatically adjusting asset ratios to reduce impermanent loss.
- Seamless integration with Solana’s top protocol: Krystal connects you to high-performing liquidity pools across Solana’s DeFi ecosystem, such as Raydium. With just a few clicks, users can discover and access the best opportunities for yield farming without the need to manually research or manage positions.
How Krystal Auto Rebalance works on Solana
Here’s a step-by-step look at how Krystal Auto Rebalance works on Solana:
1. Choose your preferred liquidity pool
Start by exploring top-performing liquidity pools across Solana’s DeFi ecosystem. Krystal’s dashboard makes it easy to discover pools offering the best APRs from trusted protocols like Raydium.
Once you’ve selected a pool, you can enable Auto Rebalance with just a few clicks.
2. Set up Auto Rebalance
Once your liquidity positions are available, head over to the “Automation” page and click “New Setup”. Select the position you want to automate.
In the Trigger Setup section, fine-tune how and when your Auto-Rebalance gets activated:
- Trigger Prices: Set the Lower and Upper Trigger Prices either in absolute values or as a percentage change from the current price. When the market price goes beyond this range, your position will be automatically rebalanced.
- Time Buffer: Use this to ensure rebalancing only activates if the price stays outside your set range for a specific duration.
In the New Range section, specify the price range for your new position after rebalancing. This ensures your liquidity stays optimized for the next market shift.
The Settings section gives you full control over how your Auto Rebalance behaves:
- Gas Fee Ceiling: Set the maximum gas fee you’re willing to pay. If the transaction cost exceeds this ceiling, Auto Rebalance won’t proceed.
- Pool and Swap Slippage: Avoid unfavorable price movements by setting acceptable slippage limits. The system will revert transactions if the market moves beyond your set tolerance.
Once you’ve configured everything, click “Approve” and then “Confirm” to activate your Auto Rebalance strategy.
3. Let Krystal handle the rest
That’s it! Once your Auto Rebalance is set up, Krystal takes care of everything behind the scenes. The system continuously monitors the market, automatically executing your chosen strategies in real-time, thus allowing you to earn passive income without manual efforts.
You can easily monitor your automated positions, track fee earnings, and adjust your strategy anytime through Krystal’s user-friendly dashboard.
That’s a wrap! 🎉 Try now here: https://defi.krystal.app/pools?chainId=101&protocol=all
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Introducing Krystal’s New Automation Fee Model
In DeFi, every percentage matters, especially when it comes to maximizing your profits. At Krystal, we’re committed to empowering users by continuously innovating the tools and services we provide. This holiday season, we are excited to announce a significant update to our fee model – a gift to our valued users.
Gone are the days of paying automation fees based on the entire value of your position. With our newly introduced Automation Fee Model, fees are now tied directly to the profits you earn. Simply put: if there are no profits, there are no fees. For more details, let’s dive in!
What’s Changing?
Previously, our automated features such as Auto Rebalance, Auto Compound, and Auto Exit were subject to an automation fee of 0.1% of your position value. While seemingly minimal, this structure could significantly impact users managing large portfolios, ultimately eating into their profits.
Starting December 24th, we are implementing a more user-friendly fee structure. The new Automation Fee will be 2% of the Performance Fee, charged only on the profits you earn from providing liquidity.
This change enhances the user experience not only on Krystal but also across various decentralized exchanges (DEXs) like Uniswap, PancakeSwap, QuickSwap, SushiSwap, Thena, and Camelot. Our platform’s support for these DEXs ensures that you can seamlessly leverage liquidity provisioning with reduced fees, maximizing your profits across multiple blockchain networks.
Fee Structure Comparison:
- Old Model: 0.1% of Position Value
- New Model: 2% of Performance Fee
Why the Update?
At Krystal, our users are our top priority. We understand that impermanent loss (IL) poses significant challenges for liquidity providers, and we’re committed to helping you navigate these hurdles effectively. One key to achieving a successful liquidity provision strategy is minimizing fees.
Based on your feedback, we recognized the importance of transitioning to a performance-based fee model. This approach allows greater flexibility in strategy development while ensuring your principal investment remains untouched. With the new model, we only charge a small percentage of the profits you earn, aligning our success with yours. This change fosters transparency and empowers you to focus on maximizing returns with peace of mind.
Example: The New Fee Model in action
Let’s consider a user with an auto-rebalance set up for their $10,000 ETH-USDC liquidity pool position. The user earns $100 in fees, while the position value remains constant.
Old Model New Model Original Position Liquidity Value $10,000 $10,000 Fee Generated $100 $100 Automation Fee $10 (0.1% of Position Value) $2 (2% of Performance Fee) New Position Liquidity Value $9,990 $10,000 Fee Generated $100 $98 Old fee model vs New fee model As illustrated, the new fee model results in significantly reduced costs – up to 5 times lower fees, based on this scenario.
How to Switch to the New Automation Fee Model
Transitioning to the new fee model is quick and straightforward. If your automation setup qualifies for this update, you can begin enjoying lower fees in just a few steps:
- Visit Krystal’s Website: Log into your wallet and navigate to the automation section.
- Initiate Migration: Click the “Progress Migration” button on the pop-up notification.
Once the migration is complete, your automation setup will be updated to the new, more cost-effective fee model.
How to migrate your automation For more information, visit: Krystal’s website
We hope this updated Automation Fee Model enhances your experience with Krystal, making your liquidity provisioning journey smarter and more profitable. If you have any questions or feedback, our team is here to support you.
Let’s work together to make your DeFi journey as rewarding as possible. Here’s to smarter strategies and greater success!
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Krystal Point System
🔵 Last Updated on 12/12/2024.
Introducing Krystal Points
The Krystal Points program is a specially tailored initiative that aims to show our gratitude and give back to our dedicated users. These are the individuals who have used, are currently using, or will use Krystal’s products in the near future as part of their LP journey. Our users make us great, and this program is our first step in actively involving them in the future growth and success of Krystal.
There are three types of Krystal Points you can earn:
- Retroactive points for wallet addresses that were snapshotted on 11:00 UTC, March 25, 2024. The conditions to receive these points are detailed in the following section.
- Points for wallet addresses that participate in tasks after the snapshot period.
- Extra points for partners’ communities
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What can I do to earn Krystal Points?
1. Retroactive points
You will receive retroactive points if you fall into at least one of the following categories:
- Early adopters: You are an LP user who swapped or performed any LP transactions on Krystal since our revamp in November 2023 up until our snapshot time
- You minted a Krystal NFT from our 2 Galxe campaigns: Celebrating 2 Years campaign and LP campaign
Please note: The snapshot for retroactive points was captured on March 25, 2024, 11:00 UTC
Even if you are ineligible for retroactive points, you can begin accumulating Krystal Points from now on. Regardless of how late we’ve met, you remain a valued user to us 😉
2. Points for current users
You can earn Krystal Points through many different activities, including:
Daily check-in:
Check in and maintain your streak to unlock more points
LP Activities:
🔵 Updated on 10/06/2024 : For each dollar of fees you claim on a LP position opened on Krystal, you will now earn 100,000 points. 🔥 This update applies regardless of whether the fee is claimed through Krystal’s UI or another project’s UI.
- Open LP positions using Krystal’s Zap In
- Close LP positions using Krystal’s Zap Out
- Compound LP fees on Krystal
- Rebalance your LP position on Krystal
- Set up Auto-Rebalance (points will be added when the transaction is triggered)
Note: Points will be added for transactions on 6 chains: Ethereum, BNB chain, Polygon, Arbitrum One, Base, and Optimism. Please find details in the Rules for Zap In, Zap Out, Compound, and Rebalance section below.
Swap on Krystal:
🔵 Updated on 10/06/2024 : Points for swapping remain to 10 points per dollar swapped.
Update on 11AM UTC, March 27, 2024:
- Swap on Aurora, Fantom, Avalanche, Klaytn, Cronos and Linea will no longer get points. All transactions before this announcement on these 6 chains still get points.
- Wrap and Unwrap transactions will not earn points.
Social Activities:
- Follow Krystal’s X
- Weekly social quizzes
- Write X posts and get retweeted by Krystal
- Refer your friends and earn 10% their points from their LP transactions on Krystal (including Zap In, Zap Out, Rebalance, and Compound). To start, create a unique referral link for yourself HERE and begin referring your friends!
3. Extra points for partners’ communities
Our journey would not be possible without our partners, and we are delighted to welcome THENA and OneID as part of the Krystal Point program.
As special partners of Krystal, THENA and OneID users will enjoy the following privileges:
THENA
While performing LP tasks on THENA, users will earn x5 points compared to other tasks. The LP tasks include:
- Open LP positions using Krystal’s Zap In
- Close LP positions using Krystal’s Zap Out
- Compound LP fees on Krystal
- Rebalance your LP position on Krystal
- Set up Auto-Rebalance (points will be add when the transaction is triggered)
Note: Rules have been applied. Please find details in the Rules for Zap In, Zap Out, Compound, and Rebalance section below.
OneID
Each wallet address that holds OneID and is connected to Krystal will receive 1,000 free points.
Please note:
- Each OneID can only receive 1,000 free points once. If the ID is linked to multiple wallets, only the first wallet that connects to Krystal will receive points.
- If you have multiple OneIDs in a wallet, the number of points you will receive is calculated using this formula:
1,000 points x total number of valid OneIDs. - A “valid” OneID is one that hasn’t received 1,000 free points in any snapshot round before.
- Every Monday at 8AM UTC, we will take a snapshot of all wallets with OneIDs and distribute the points after that. This means that your points will not be added immediately when you connect your wallet.
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Fixed token allocation to Legacy Users
Legacy users: Users who had interacted with Krystal’s smart contract before January 1, 2024
- All legacy users will be marked as “Yes” in “Your Krystal Balance” tooltip on the Krystal Points homepage.
- There is a fixed token allocation dedicated to legacy users, which is not impacted by the number of points they earn.
Note: To filter out bots and increase the allocation to loyal legacy users, we will only airdrop to legacy wallets which have at least 10,000 points by the end of the Krystal Points program, which is equivalent to swapping $1,000 or Zap In with $100 going through swap
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Rules for Zap In, Zap Out, Compound, and Adjust Range
🔵 Updated on 10/06/2024: We have updated our points system for Zap In, Zap Out, Compound, and Rebalance activities. Now, you will earn 100 points for every $1 you Zap In or Zap Out, regardless of whether a swap is triggered or not. This change aims to simplify the rewards process and ensure all users are compensated for their transactions.
Below are some examples reflecting the new points mechanism:
- Zap In an out-range position: Previously, no points were awarded since no swap was triggered. Under the new system, you will earn points based on the dollar value zapped in, even if no swap occurs.
- Zap In 100 USDT into an in-range ETH/BNB position: Under the old system, you would earn 10,000 points, as the whole 100 USDT got swapped into ETH and BNB. With the new rules, you will continue to earn 10,000 points for zapping in 100 USDT, reflecting the updated general rule.
- Zap In $100 worth of ETH into an in-range ETH/BNB position, in which $20 worth of ETH was swapped into BNB: Previously, you earned 2,000 points for the $20 that got swapped. Now, you will receive 10,000 points for the total $100 zapped in, not just for the swapped amount.
Previous Mechanics:
We will only give points for Zap In, Zap Out, Compound, and Rebalance based on the swap volume triggered: 100 points per $1 swap triggered
Below are some examples:
- Zap In an out-range position: No point since there is no swap triggered
- Zap In 100 USDT into an in-range ETH/BNB position: 10,000 points, since the whole 100 USDT got swapped into ETH and BNB
- Zap In $100 worth of ETH into an in-range ETH/BNB position, in which $20 worth of ETH was swapped into BNB: 2,000 points, given $20 worth of ETH got swapped
(Same for Zap Out, Compound, and Rebalance)
The Rule for Auto-Rebalance
🔵 Updated on 10/06/2024: For the Auto-Rebalance feature, a new points mechanism has been implemented. Now, when the Auto-Rebalance feature is triggered, you will earn 100 points per dollar processed through this feature.
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How do I get my Krystal Points?
To retrieve the retroactive points you’ve already earned, as well as to earn more Krystal Points:
- Access Krystal website or download Krystal mobile app (Android | IOS)
- Connect your wallet
- Go to the Krystal Points tab
In the Krystal Points tab, you can:
- Maintain a daily check-in streak to unlock more significant rewards
- Refer friends using your unique referral link
- Earn Krystal Points by completing tasks. These tasks can be one-time or recurring and may vary over time. Boost your Krystal Points by regularly checking the Krystal app and completing tasks
- Check your position on the leaderboard to see how you compare to other Krystal users
Note: Points earned will be automatically updated after you complete a qualified task. Krystal reserves our rights to eliminate exploiters from our airdrop allocation.
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A long journey ahead…
The Krystal Points program is our initial step towards actively involving our users in Krystal’s future growth and success.
We will share more updates about our airdrop and detailed information about the Krystal token soon. Stay tuned by following us!
LFG! 💚
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KyberSwap STIP Trading Campaign for Krystal users
We are thrilled to announce an exciting new campaign from our prestigous partner KyberSwap, a leading decentralized exchange (DEX) aggregator.
As part of our partnership, all Krystal users will be eligible to participate in the KyberSwap STIP Trading Campaign. This campaign offers a fantastic opportunity for our liquidity providers to earn extra rewards while using Krystal.
Campaign Details
- Total Reward Pool: 315,000 ARB (approximately $212,000)
- Campaign Duration: July 08 – September 15
- Participants: All users of KyberSwap and KyberSwap partners, including Krystal
How to Participate
Participating in the campaign is straightforward. Whenever you perform any of the following transactions on Krystal and they are routed through KyberSwap, you will earn Kyber points:
- Zap In
- Zap Out
- Rebalance / Auto-Rebalance
- Auto-Rebalance
- Compound
- Swap
Example: You Zap In $10,000 worth of ETH into the pool ETH-BNB. In this transaction, $5,000 worth of ETH is swapped to BNB through KyberSwap. Then that $5,000 swap volume will earn you points in the KyberSwap Trading Campaign
To maximize your rewards, it’s crucial to understand how points are collected based on the type of trades you execute. Points are awarded according to the volume of transactions routed through KyberSwap, categorized into four distinct categories:
- Category 1: ARB trading will give 10 Points per USD swapped. It can be paired with any eligible tokens from the list, except plsARB that falls in Category 3.
- Examples: ARB <> USDC; ETH <> ARB; PENDLE <> ARB
- Category 2: Uncorrelated tokens trading will give 5 Points per USD swapped. This includes trading any eligible token to any eligible token that does not fall in Category 1, 3, or 4.
- Examples: ETH <> USDT; WBTC <> WSTETH; PENDLE <> KNC
- Category 3: ETH Derivatives trading will give 1 Point per USD swapped.
- Examples: ETH <> WSTETH; EZETH <> RETH; WEETH <> ETH
- Category 4: Stablecoins to Stablecoins trading will give 0.5 Points per USD swapped.
- Examples: USDC <> USDT; FRAX <> DAI; USDC.e <> MIM
NOTE: Any swap below $1 won’t earn points or rewards. Points are calculated for each full USD swapped; cents don’t count. Example: A trade on ARB <> ETH of $3.90 will give 30 points, while a trade of $0.50 will give 0 points.
You can check your Kyber points by visiting their campaign page HERE.
You can learn more about the overall campaign by visiting Kyber post HERE.Join the Campaign
Don’t miss out on this incredible opportunity to earn substantial rewards while engaging with the DeFi ecosystem. Make your transactions on Krystal from July 08 to September 15 and start collecting Kyber points today!
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The Art of Liquidity in DeFi: Strategic Insights on LPs
In the ever-evolving realm of decentralized finance (DeFi), liquidity pools stand as the linchpin that powers the seamless exchange of assets on DEXs (decentralized exchanges) and the generation of passive income for liquidity providers. These automated market makers (AMMs) serve not just as a backbone for trading but also as a canvas for the savvy liquidity manager aiming to maximize returns in a dynamic ecosystem. With the promise of liquidity pool crypto assets driving a new era of financial freedom, understanding the intricacies of how these pools operate, and the strategies for mitigating risks such as impermanent loss becomes paramount for anyone looking to dive into the DeFi waters.This article will navigate you through the essential strategies for choosing the right liquidity pools, managing the daunting impermanent loss, and the art of rebalancing to maintain portfolio equilibrium. Furthermore, we’ll explore avenues for diversification and risk management, how to capitalize on yield farming and incentives, and the effective use of LP tokens. The journey also includes leveraging cutting-edge tools and resources for liquidity providers and the breakthrough concept of concentrated liquidity, providing a comprehensive roadmap for thriving as a liquidity manager or provider in the decentralized exchanges landscape.
Choosing the Right Liquidity Pool
In the vast ocean of decentralized finance (DeFi), selecting the right liquidity pool can be akin to finding a pearl. It’s not just about the shimmer but also about the value it holds. Let’s dive into the essential factors you should consider when choosing a liquidity pool, ensuring your dive into the DeFi world is both rewarding and insightful.
Understanding Total Value Locked (TVL)
Total Value Locked (TVL) is your first beacon in the murky waters of liquidity pools. It represents the total amount of assets held in a DeFi protocol. A higher TVL indicates a thriving ecosystem with a significant amount of assets under management, suggesting stability and trustworthiness. It’s also a reflection of user confidence, as a high TVL shows that many users are willing to lock their assets in the protocol. When evaluating a liquidity pool, consider its TVL as a measure of its health and growth potential. A pool with a consistently high TVL is often a safer bet, as it shows sustained user interest and liquidity.
- Calculate TVL: Determine the current market value of all assets in the pool.
- Compare TVLs: Look at the TVLs of different pools to gauge their size and popularity.
- TVL Ratio Analysis: Assess the TVL ratio (market cap of DeFi token/TVL of the DeFi protocol) for insights into the pool’s valuation.
Assessing Daily Trade Volume
The daily trade volume of a liquidity pool is like the current of a river – it shows how much activity is flowing through. A higher trade volume means more swaps are happening, which translates to higher fees for liquidity providers. It’s a critical metric for understanding the pool’s popularity and the potential for earning transaction fees.
- Review Trade Histories: Examine short and long-term trading volume histories to predict future activity.
- Volume Growth: Check if the trading volume is constant or increasing, as this can indicate a healthy and engaging platform.
Evaluating Trade Sizes in Liquidity Pools
While high trading volume is essential, understanding the average trade size can provide deeper insights into the dynamics of a liquidity pool. It’s a common misconception that the profitability of fees directly correlates with the number or size of trades. In reality, fees in automated market makers (AMMs) like Uniswap are calculated as a percentage of the trade volume, not the number of trades. Therefore, whether a pool processes a few large trades or many small trades, the total fee revenue depends on the cumulative trading volume.
- Volume Over Quantity: Focus on the total volume traded rather than the number of trades. A pool with a smaller number of large trades may generate the same fees as a pool with many smaller trades if the total trading volume is similar.
- Fee Proportions: Understand the fee structure of the pool. Pools with higher fee percentages can offer greater returns on the same volume, compensating for potentially lower trading activity.
By analyzing these aspects, you can more effectively choose a liquidity pool that matches your investment goals in the DeFi space. The ideal pool aligns not just with potential returns but also with your risk tolerance and strategic approach. Navigate wisely to find your most suitable investment waters in the expansive DeFi sea.
Managing Impermanent Loss
Impermanent loss (IL) is a significant risk when providing liquidity in decentralized exchanges (DEXs), particularly for assets with high volatility. Understanding and managing this risk is crucial for maintaining the value of your investments in liquidity pools. Below, we explore strategies to mitigate impermanent loss and emphasize the importance of selecting the right asset pairs:
Strategies to Mitigate Impermanent Loss
- Choosing Pools of Stablecoin Pairs:
Participating in liquidity pools that involve highly correlated assets or stablecoins can significantly reduce the potential for impermanent loss. Pools that pair stablecoins, such as USDT/USDC, tend to experience minimal price disparity, thus maintaining a more stable value. - Utilizing Automated Strategies:
Advanced algorithms and automated trading strategies can dynamically adjust the asset ratios in your liquidity pool to respond to market conditions and minimize impermanent loss. These tools often require a deeper understanding of market mechanics but can be highly effective in preserving the value of your investments. - Incentive Structures:
Some protocols offer additional rewards in the form of protocol tokens to compensate for potential losses due to impermanent loss. While this can be an attractive strategy, it’s important to consider the long-term value of these tokens and potential market saturation. - Insurance Options:
Emerging solutions in DeFi include insurance products designed to protect against significant impermanent loss. Before opting for such solutions, carefully evaluate the terms, costs, and coverage limits to ensure they align with your risk management strategy.
Importance of Correlation in Asset Pairs
Understanding the correlation between assets in a liquidity pair is pivotal in managing impermanent loss. Assets that move independently or in opposite directions (low or negative correlation) tend to reduce the risk of impermanent loss but might attract fewer trading fees due to less trading activity. On the other hand, highly correlated asset pairs might offer more fees but come with a higher risk of impermanent loss.
- Low Correlation Pairs:
Opting for pairs like ETH/LINK or ETH/UNI can provide a safeguard against significant market shifts affecting both assets similarly. This strategy might result in lower fee earnings but offers a more stable investment in volatile markets. - High Correlation Pairs:
Pairs such as BTC/ETH or similar high-cap cryptocurrencies might experience simultaneous growth or decline, increasing the risk of impermanent loss if the market moves unfavorably.
By strategically selecting the right asset pairs and employing risk mitigation strategies, you can effectively manage impermanent loss, ensuring a more stable and profitable experience in liquidity provisioning within the DeFi ecosystem.
Diversification and Risk Management
Diversification and risk management are essential practices for anyone venturing into the world of decentralized finance (DeFi) and liquidity pools. By spreading investments across various pools and understanding the potential risks involved, liquidity providers (LPs) can safeguard against market volatility and optimize their returns. This section delves into the benefits of diversifying your portfolio across different pools and strategies for identifying and mitigating potential risks.
Benefits of Diversifying Across Pools
- Spread of Risk: Diversification is a cornerstone of investing, more so in the volatile DeFi space. By allocating assets across various trading pairs and liquidity pools, you effectively distribute and thereby reduce your exposure to the risk associated with any single pool. This approach is akin to not putting all your eggs in one basket, ensuring that the underperformance of one asset doesn’t disproportionately impact your overall portfolio.
- Access to a Broader Range of Opportunities: Different liquidity pools offer varying levels of returns based on trading volumes, fees, and the assets involved. While major pairs like ETH/USDT might attract a lot of competition, thereby reducing potential returns, diversifying across pools allows LPs to capture opportunities from less saturated markets, potentially increasing overall earnings.
- Balancing High-Risk and Low-Risk Investments: By diversifying, you can balance your portfolio between high-risk and low-risk pools. High-risk pools might offer the allure of higher returns but come with a greater chance of impermanent loss. On the other hand, pools with stablecoin pairs or those involving assets with lower volatility offer more stable returns, albeit potentially lower. This balance can help achieve a more consistent performance across your DeFi investment portfolio.
Identifying and Mitigating Potential Risks
- Understanding Impermanent Loss: One of the key risks in providing liquidity is impermanent loss, which occurs when the price of assets in a pool changes compared to when they were deposited. To mitigate this, consider pools with assets that have lower volatility or those that implement dynamic fee structures. These structures can incentivize LPs to remain in the pool longer, potentially offsetting losses through accumulated fees.
- Assessing Liquidity Pool Performance: Regular assessment of the liquidity pools you’re invested in is crucial. This includes monitoring the total value locked (TVL), daily trade volume, and average trade size, which can provide insights into the pool’s health and your potential earnings. Adjust your investments based on these performance metrics to optimize returns.
- Allocating According to Risk Tolerance: Your investment in liquidity pools should reflect your risk tolerance. High-risk pools may offer the potential for greater returns but come with an increased risk of impermanent loss and volatility. Conversely, low-risk pools provide more stable returns. Regular rebalancing of your portfolio in response to changing market conditions can help maintain an optimal diversification level that aligns with your investment goals.
- Educating Yourself on DeFi Risks: Beyond impermanent loss, LPs face risks such as slippage, asset depreciation, and smart contract vulnerabilities. Familiarizing yourself with these risks and how they can impact your investments is crucial. Utilize resources like impermanent loss calculators and stay informed about the latest developments in DeFi security to make informed decisions.
By adopting a strategic approach to diversification and risk management, you can navigate the complexities of liquidity pools with greater confidence. Balancing your portfolio across different assets and pools, while staying informed about potential risks, can enhance your ability to generate stable returns in the dynamic landscape of DeFi.
Utilizing Yield Farming and Incentives
Yield farming, or liquidity mining, is a cornerstone of the decentralized finance (DeFi) ecosystem, offering a way for liquidity providers to earn rewards. This process not only fuels the liquidity in decentralized exchanges (DEXs) but also provides an avenue for earning passive income through various DeFi platforms. Here, we’ll dive into how yield farming works and share strategies for maximizing your rewards.
How Yield Farming Works
- Choosing a Platform:
Begin your yield farming journey by selecting a reputable DeFi platform. Key considerations should include the platform’s security measures, its reputation within the DeFi community, and the potential yield it offers. - Providing Liquidity:
The essence of yield farming involves depositing token pairs into a liquidity pool via a smart contract. For example, you might deposit Ethereum (ETH) and a stablecoin like DAI in equal proportions. - Earning Rewards:
As a liquidity provider, you’re rewarded with a share of the platform’s trading fees and additional rewards in the form of tokens. Platforms with high trading volumes can offer significant rewards.
Maximizing Rewards Through Yield Farming
To make the most out of yield farming, consider the following strategies:
- Diversification:
Spread your investments across various liquidity pools and platforms rather than focusing on a single pool. This approach minimizes risk and exposes you to a wider range of rewards. - APY Assessment:
The Annual Percentage Yield (APY) is a critical metric for yield farmers. Comparing APYs across platforms helps identify the most profitable opportunities. However, be wary of exceptionally high APYs, which may signal higher risks. - Mitigating Impermanent Loss:
Impermanent loss, a risk in yield farming, can be mitigated by choosing less volatile token pairs or employing strategies such as yield farming with impermanent loss insurance. - Staking and Yield Aggregators:
Staking the LP tokens received from yield farming can compound your rewards. Yield aggregators automate fund movements between platforms to maximize returns. - Timing:
Market trends and news can affect token values. Use limit orders to manage your entry and exit points in liquidity pools effectively. - Risk Management:
While yield farming can offer high returns, it comes with significant risks. Never invest more than you can afford to lose and consider balancing your portfolio with less risky assets.
By understanding the mechanics of yield farming and employing strategic approaches to maximize rewards, you can enhance your earning potential in the DeFi space. Remember, diversification, careful platform selection, and risk management are key to navigating the yield farming landscape successfully.
Leveraging Tools and Resources
Monitoring Pool Performance
To stay ahead in the dynamic DeFi landscape, it’s crucial to continuously monitor the performance of your liquidity pools. Utilizing tools like Krystal tools can simplify this task by providing comprehensive analytics on your pool’s performance, including APY (Annual Percentage Yield) and APR (Annual Percentage Rate). These tools offer a two-tiered dashboard that not only tracks your active deposits but also helps you spot the most profitable liquidity pools, making it easier to manage your LP exposure and make informed decisions.
- Track Real-Time Performance: Use liquidity pool trackers to monitor the current performance metrics of your pools. This includes checking the APY/APR, which can fluctuate based on the pool’s trading volume and liquidity.
- Assess Risk and Returns: Tools like Krystal provide actionable analytics that help you understand the risk-reward ratio of different pools, enabling you to balance your portfolio according to your risk tolerance.
- Automated Alerts: Set up alerts for significant changes in pool metrics such as sudden drops in APY or spikes in trading volume, which could affect your investment.
Using Analytical Tools for Better Decision-Making
Krystal enhances your decision-making process in liquidity pool management with its state-of-the-art analytical tools. Our platform offers an in-depth look into the DeFi market by compiling and visualizing data from multiple blockchains, enabling you to make informed decisions based on current and historical performance metrics.
Krystal provides a detailed view of the DeFi LP landscape, including tracking metrics like total value locked (TVL) across various protocols and blockchains. This broad market overview helps you understand market dynamics and identify high-potential opportunities.
By incorporating Krystal’s analytical tools into your liquidity management strategy, you not only gain a competitive advantage in the dynamic DeFi sector but also enhance your ability to optimize returns and effectively mitigate risks. These resources simplify the tracking and analysis process, providing you with the critical insights needed to succeed in managing your positions and get a constant passive earning.
Conclusion
Throughout this exploration of the Art of Liquidity in DeFi, we’ve provided a comprehensive look into the strategies necessary for optimizing your presence in Automated Market Makers (AMM) pools, tackling impermanent loss, and enhancing returns through yield farming and strategic pool selection. By highlighting the importance of diversifying your investment portfolio, managing risks effectively, and leveraging advanced tools for informed decision-making, we’ve laid down a foundational roadmap for both newcomers and seasoned investors in the decentralized finance ecosystem.
As the DeFi landscape continues to evolve with new technologies and market dynamics, the insights shared here aim to empower investors to navigate these waters with confidence and strategic acumen. Remember, the journey to maximizing liquidity pool returns is one of continuous learning and adaptation. By staying informed, utilizing the right tools, and applying the strategies discussed, you are well-equipped to capitalize on the opportunities that DeFi offers while managing the risks inherent in this innovative financial frontier.
FAQs
- How do Automated Market Maker (AMM) liquidity pools function?
Automated Market Makers utilize liquidity pools where users contribute cryptocurrencies to ensure there’s enough liquidity for trading. These pools use specific algorithms to determine the prices of tokens based on their relative proportions in the pool. Users can then trade tokens directly through the AMM by swapping one token for another. - What exactly is a liquidity pool in decentralized finance (DeFi)?
In DeFi, liquidity pools are essential components that consist of pooled funds used to facilitate various activities within the ecosystem. For instance, if someone wants to exchange ETH for USDC, the tokens they receive are sourced from a liquidity pool that holds the necessary assets. - What strategies are involved in managing a liquidity pool?
Managing a liquidity pool involves an investment strategy that transforms how trading and borrowing are conducted on DeFi platforms. Essentially, a liquidity pool aggregates all the funds deposited into a smart contract, making them available for different operations like decentralized trading, financing, and lending. - What is the mathematical formula used in AMM liquidity pools?
The pricing of assets within a liquidity pool is governed by a mathematical formula, typically the Constant Product Market Maker model. This model is described by the equation x*y=k, where “x” and “y” are the quantities of two different tokens in the pool, and “k” remains a constant value, ensuring the pool’s total value stays balanced during trades.
- Calculate TVL: Determine the current market value of all assets in the pool.
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Krystal Product Update – April 2024
April has been a successful month for Krystal with $110M LP volume despite the unfavorable market condition. This achievement serves as a strong motivation for us to persist in our efforts to establish Krystal as a leading Automated Liquidity Manager in the DeFi space. Throughout April, we introduced several new features and implemented significant changes aimed at enhancing our users’ experience. Let’s explore these updates below.
1. New Features
1.1. Support Swap, Zap In, and Zap Out on Base chain
Since the start of 2024, Base has emerged as a prominent Layer 2 chain for liquidity providers, boasting over $1.5 billion in Total Value Locked (TVL) and a daily volume of $400 million. We see this as just the beginning for Base, especially considering its potential to onboard millions of Coinbase users. Our choice to integrate Base has been validated, with Krystal recording $16 million in LP volume on Base in April alone, solidifying Base’s position as one of the top three most popular chains on Krystal.
Pic 1. Krystal’s LP Volume on Base by transaction type 1.2. Support Zap In and Zap Out on both Krystal Android and iOS apps
During the time of high market volatility, managing LP has become increasingly challenging, particularly since our users aren’t constantly at their computers. To address this, we’ve incorporated Zap In and Zap Out features into our mobile apps, offering our users a more convenient experience.
1.3. Support Add Liquidity, Remove Liquidity and Claim Fees on Krystal for PancakeSwap v2, v3; UniSwap v2, and SushiSwap v2
With these additions, users can now directly add or remove liquidity and claim fees on those protocols without leaving the Krystal UI. This represents a crucial step towards providing a complete liquidity provider journey through Krystal.
2. Deprecated Features
2.1. Stop supporting swap on Solana chain
Given that we currently don’t have a concrete plan to support liquidity providers on Solana, we temporarily halted our Swap function on the Solana chain. This decision allows us to direct our focus towards other chains where we can provide more effective services to our liquidity providers. While Solana remains highly desirable, we will reassess its feasibility and viability before considering its reintroduction.
2.2. Remove Portfolio tab, Transaction History tab, NFT tab, and Notification on Web
As we are refining our web platform to better cater to liquidity providers, we have removed legacy features originally developed for Krystal as a wallet. This adjustment aims to offer users a more streamlined experience focused on liquidity provision while also allowing us to allocate resources more effectively towards developing impactful features for our users.
Instead of Portfolio tab, users can check their wallet holding by clicking on their wallet dropdown on the sidebar.
Pic 2. Wallet holding info 3. Other Improvements
3.1. Add short-cut buttons for LP transactions
3.1.1. “Add liquidity” button on Explorer Page
Pic 3. “Add Liquidity” shortcut 3.1.2. “Add Liquidity”, “Remove Liquidity”, “Claim Fees”, and “Adjust Range” buttons on Profile page.
Pic 4. “Add Liquidity”, “Remove Liquidity”, “Claim Fees”, and “Adjust Range” 3.2. Update Krystal Docs
All information about Krystal as an ALM can be found in our Krystal Docs page. We’ll continue updating the docs as we develop Krystal further.
We hope these changes will better help you manage your liquidity with Krystal. If you have any inputs or feedback to us, please don’t hesitate to let us know through our social media channels:
X: https://twitter.com/KrystalDeFi
Telegram: https://t.me/KrystalDeFi_Global -
Introducing Krystal’s Transformation to The Best DApp for Liquidity Provisioning
You may have noticed some recent changes at Krystal. Today, we are launching Krystal’s new website and DApp, which perfectly align with our goal of being The Best DApp for Liquidity Provisioning.
This is one of the biggest updates in our history and a significant milestone in our journey. Created in 2021, Krystal serves as a gateway for you to effortlessly navigate the world of decentralized finance, empowering you to take control of your financial freedom. In the past two and a half years, we have made tremendous progress, delivering numerous features to millions of connected wallets and achieving over 1 million downloads of the Krystal mobile app worldwide, all thanks to our incredible community.
Our evolution mirrors the constantly evolving needs of our users and the dynamic landscape of the crypto space. This update not only lays the foundation for our long-term mission but also paves the path for a series of forthcoming product upgrades. With a fresh product vision and an unwavering commitment to delivering an exceptional user experience, we are delighted to unveil the new Krystal.
What’s new?
We strive to become The Best DApp for Liquidity Provisioning, offering seamless analytics and management tools for maximizing liquidity provision on decentralized exchanges (DEXes).
To achieve this, we are building Krystal as a DApp with a holistic ecosystem that caters to users’ liquidity provisioning journey, covering Explore → Analytics → Provide → Monitor → Exit. The new Krystal represents a more comprehensive, enhanced, and crypto-native approach.
New Website UI
We’ve completely reimagined our site to align perfectly with our product revamp!
New look, same URL. You can still access our website here: https://krystal.app/
New DApp
With the current product vision centered around Liquidity Provisioning as the core product, we have developed a new DApp that aims to enhance the user experience for you.
- The new DApp also shares the focus on Liquidity Provisioning and includes key features such as Portfolio, LP positions, Pool Explorer, and Market Discover, providing you with a comprehensive experience.
- Additionally, we have introduced a new Overview page that is more tailored to the needs of users (specifically LPers). This page displays important statistics such as Total Portfolio value, Tracking Liquidity Value, PnL, Fees, APR, and also highlights the top pools in the market.
- Furthermore, to support LPers in monitoring and adjusting their LP, we have included additional features such as Swap, Portfolio management, Token Approvals, and much more.
Our goal is to provide you with a robust and user-friendly DApp that empowers you to make informed decisions and maximize the potential of your Liquidity Provisioning activities.
Unlock the full potential of Krystal in a fresh new interface: https://defi.krystal.app/?utm_source=blog&utm_medium=post&utm_campaign=product_revamp
Note:
Please take note that the old URL https://wallet.krystal.app will be automatically changed to https://defi.krystal.app when you access it. There is no need to be concerned about this!
For your own security, we highly recommend that you visit and bookmark ✅ https://defi.krystal.app!
Once you have completed the above, the next step is to re-import your wallets on https://defi.krystal.app! This process is extremely easy and will ensure a smooth and uninterrupted experience on Krystal!
Krystal Wallet
Krystal Wallet continues to be a core component of Krystal ecosystem, acting as the Mobile Gateway to your Liquidity Provisioning.
Download and install the Krystal mobile app, available on both Android and iOS, to seamlessly access your DeFi portfolio on the move and level up your liquidity provisioning adventure.
🤖 https://play.google.com/store/apps/details?id=com.kyrd.krystal
🍎 https://apps.apple.com/us/app/krystal-one-platform-all-defi/id1558105691
Looking to the future
In addition to the existing features, we are exploring the possibilities of introducing cutting-edge tools and services that will empower users to navigate the entire liquidity provisioning process effortlessly. This includes streamlining the full-flow experience within Krystal, making it the ultimate destination for anyone looking to dive into liquidity provisioning.
Our team is dedicated to delivering unwavering support and assistance to our valued Krystal community. We understand and appreciate the expectations and needs of our community, and we are committed to meeting and surpassing them.
Get ready for a thrilling journey with Krystal as we embark on this exciting new phase, and create the best DApp for liquidity provisioning that caters to all your needs.
