FAQ (Klaytn)

Providing liquidity to a stableswap pool means you are exposed to all of the assets in the pool. For example, if you provide liquidity to the k3EYE pool, you get exposed to kDAI, kUSDT, and kUSDC.
Additionally, because the stableswap curve provides liquidity under an assumption that the exchange rate between the underlying assets is constant, arbitragers might take advantage of the provided liquidity when the assumption itself is violated. For example, suppose Tether is bankrupt, and the value of USDT drops to $0.00. In this case, fast-movers will sell all of their kUSDT to kDAI or kUSDC via a stableswap pool because the liquidity-providing algorithm will offer them a near-one-to-one exchange. This will leave the liquidity providers with a massive amount of USDT - which has no value.

Liquidity Providers to the Kokonut Swap’s StablePool can receive transaction fees as rewards. This reward is automatically compounded to the StablePool LP token. To realize your returns, you could return the LP tokens back to the pool and withdraw your original liquidity. For example, if a user deposited 3 kDAI, 3 kUSDT, 4 kUSDC to receive 10 k3EYE LP tokens, assuming APY was 100% for that pool, the user could withdraw 6 kDAI, 6 kUSDT, 8 kUSDC with the same 10 k3EYE after 1 year(This also assumes the composition of the pool remains constant).
Additional rewards can be earned if you use the same LP tokens for yield farming. For example, Kokoa Finance, a decentralized stablecoin project, offers liquidity incentives for their stablecoin(KSD). If you provide liquidity to the KSD4EYE pool and deposit the received KSD4EYE LP token in the Kokoa FARM, you can earn additional KOKOAs. Moreover, in the near future, KSD4EYE will also be used as a pathway to further rewards after Kokonut Swap's governance token, EYE, is launched.

When providing liquidity to a pool, you can deposit any combination of assets that are in the pool. In any case, the assets will be converted automatically with respect to the pool’s token composition before being deposited into the pool. For example, you may deposit 10 KSD into the KSD4EYE pool - which consists of KSD, kDAI, kUSDT, and kUSDC. You may also deposit 5 KSD, 3 kDAI, 1 kUSDT, and 1 kUSDC at the same time.

k3EYE and KSD4EYE are LP tokens for the ‘kDAI-kUSDC-kUSDT’ pool and the ‘KSD-kDAI-kUSDC-kUSDT’ pool.

sEYE is a tokenized representation of gov-staked EYE. Users can gov-stake EYE to participate in EyeDAO governance and earn gov-rewards. It takes 21 days to convert sEYE into EYE. However, there is also an 'Instant Unstake' option where one can pay some protocol fee to instantly convert sEYE into EYE.

Last updated 9 months ago