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An Automated Market Maker (AMM) is a type of decentralized exchange protocol that relies on mathematical formulas to set the price of a token pair. Unlike traditional exchanges, which use an order book to match buyers and sellers, AMMs enable instant trades by interacting with liquidity pools.
In SaucerSwap V1, yield farming involves staking liquidity tokens in the Masterchef smart contract. Rewards are distributed pro-rata in the form of SAUCE and HBAR tokens, based on the amount of liquidity you've provided. For more information, see Yield Farm.
In SaucerSwap V2, the Liquidity-Aligned Reward Initiative, or LARI, is a system that streamlines token incentives for efficient liquidity provision. Rewards are automatically distributed every two weeks and can be configured in various tokens and amounts, offering flexibility for different campaigns. No need to stake liquidity; rewards are earned directly. For more information, see LARI.
SaucerSwap V2 introduces concentrated liquidity, allowing liquidity providers to allocate their capital within specific price ranges, thereby optimizing capital efficiency. Additionally, V2 offers multiple fee tiers, giving liquidity providers more flexibility to manage risk and return, a feature not present in V1. Finally, V2 replaces yield farming with the far more efficient LARI.
Concentrated liquidity, a feature of SaucerSwap V2, allows liquidity providers (LPs) to specify custom price ranges where their capital will be used to faciliate trades.
- 1.Custom Price Ranges: LPs can set specific price ranges within which their liquidity is active. For example, if you're an LP for an USDC/HBAR pair, you could specify that your liquidity is only active when the price is within 0.09 and 0.11.
- 2.Capital Efficiency: Because liquidity is focused within certain price ranges, less capital is needed to achieve the same or better trading outcomes, such as reduced slippage. This leads to higher capital efficiency.
- 3.Variable Fees: V2 has a tiered fee structures, allowing LPs to earn different fees based on the risk associated with their chosen price ranges.
- 4.Composite Curve: All individual liquidity positions across different price ranges are aggregated to form a composite bonding curve, against which users trade.
- Higher Yields: LPs can potentially earn more fees per unit of capital invested, especially if they accurately predict the asset's trading range.
- Flexibility: LPs have the freedom to adjust their price ranges based on market conditions, thereby optimizing their yield.
Concentrated liquidity thus offers LPs the potential for higher real yields through increased capital efficiency, while also providing users with better trading conditions like lower slippage.
SaucerSwap V2 is based on Uniswap V3 smart contracts
SaucerSwap is unique in its integration with the Hedera Token Service (HTS), providing rapid throughput and a low-cost, U.S. dollar-denominated fee structure. Hedera's architecture ensures fair transaction ordering on SaucerSwap, which nullifies the possibility of MEV attacks seen in Ethereum-based protocols like Uniswap. Other unique features include LARI, a yield-bearing HBAR wrapper, and single-sided staking. For a detailed overview, see Unique Advantages.
Impermanent loss (IL) occurs when providing liquidity in an AMM-based decentralized exchange and the price ratio of the trading pair diverges from the initial ratio. This results in a temporary loss of value for the liquidity provider, which may become permanent if the price ratio doesn't revert to its original state.
Slippage refers to the difference between the expected price of a trade and the price at which the trade is executed. It occurs in both centralized and decentralized exchanges, often due to market volatility, large trade sizes, or low liquidity.
Liquidity providers are compensated primarily through trading fees generated from swaps that occur in the liquidity pool they contribute to. In addition, SaucerSwap V1 and V2 offer additional incentives through the Yield Farm and LARI, where LPs earn tokens as rewards for providing liquidity.
In both SaucerSwap V1 and V2, traders are charged a swap fee. For V1, it is a fixed 0.30%, while V2 offers variable rates of 0.05%, 0.15%, 0.30%, or 1.00%. Out of the collected fee, 5/6 goes to liquidity providers, and the remaining 1/6 is allocated to the protocol. This protocol share is used for SAUCE token buybacks, which are then distributed between the Infinity Pool and the DAO.
Your estimated earnings are calculated based on the current APR. The amount you actually harvest will be accurate; the discrepancy is merely a front-end issue arising from the cost associated with reading contract balances.
The SaucerSwap interface is permissionless but secure, with safeguards like a tiered listing system to protect users and ensure market clarity. In this system, tokens are categorized into one of three classes: default, extended, or untracked. For details, see Token Listing.
Single-sided staking rewards on SaucerSwap come from three key sources: a sixth of swap fees from both V1 and V2 liquidity pools, 30% of the Masterchef contract's devcut allocation, and proof-of-stake rewards from the WHBAR contract. For more information, see Single-Sided Staking.
To stake your SAUCE tokens, navigate to the Infinity Pool on the SaucerSwap interface. Upon staking, you will receive xSAUCE, which serves as the liquid staking token in the SaucerSwap ecosystem. Your staking rewards manifest as an increase in the relative value of xSAUCE to SAUCE. To realize these rewards, simply unstake your tokens from the Infinity Pool. For a guided tutorial, see Single-Sided Staking.
Your transaction could be failing due to a couple of typical issues:
contract_execution_reverted. The former issue can be addressed by making sure you have sufficient HBAR to cover the network fees. The latter can often be resolved by adjusting your slippage tolerance in the settings modal of the interface.
If you are unable to see your tokens in MetaMask, it is likely because you need to import the token using its EVM address. You can find this address either within the SaucerSwap interface or on HashScan. Once imported, your tokens should be visible in your MetaMask wallet.
In the context of Hedera, token association refers to the process of linking a specific HTS token to an existing account. This is a necessary step before the account can send, receive, or hold that particular token.
To claim your fees in V1, simply remove your liquidity from the pool. The accrued fees are reflected in the value of your LP tokens, so you will automatically receive your share of the fees when you redeem these tokens.
14% of the max supply (140 million SAUCE) was distributed to community members holding Planck Epoch Collectible (PEC) NFTs based on the type and number of NFTs in their account. No private sales or ICOs were conducted.
In V2, LPs have the ability to trade one asset for another by depositing liquidity into a price range entirely above or below the current spot price, emulating a fee-earning limit order that executes along a smooth curve. A more conventional implementation of limit orders is on the roadmap.
You can obtain HBAR by swapping for it on the SaucerSwap protocol, purchasing it from centralized exchanges, using fiat-to-crypto gateways, or through the SaucerSwap Discord faucet. For more details, see Obtain HBAR.
USDC is a fiat-backed stablecoin, pegged to the U.S. dollar, and issued natively on the Hedera network as an HTS token. On the other hand, USDC[hts] originates on the Ethereum blockchain, where it is also issued by Circle, and is then bridged to the Hedera network via Hashport. The [hts] subscript signifies that this asset has been bridged.