What does LP mean?

How to become LP, why would you do so, and what happens to your money when you do

LP stands for Liquidity Provider. There are the people who deposit money into the xSigma pool to help it conduct trades. Read more about how this works in the "What happens to your liquidity" section.

xSigma Labs doesn't control LPs funds in any way and doesn't carry any responsibility for potential loss of funds. Do your own research into the project's source code and economics.

Why being LP?

Being an LP on xSigma is rewarded in two ways.

First, LPs receive a share of all the transaction fees the xSigma exchange executes. A portion of the transaction fees goes to LPs, with a value that can vary from 0% to 100% and can be changed by SIG holders through DAO voting.

Second, LPs can stake their pool share to receive SIG tokens. SIG tokens are minted and distributed according to a predefined formula. This gives you a vote in DAO decisions. Initially, staking your pool share is the only way to receive SIG tokens.

Early LPs will receive x2 rewards! Read more

Become an LP

To become an LP with xSigma, you need to:

  1. Buy stablecoins

  2. Deposit on the Liquidity page

  3. Stake on the Rewards page to earn SIG

Let's walk through each of these steps.

Buying stablecoins

xSigma is a stablecoin exchange for DAI, USDC, and USDT. To become a Liqudity Provider (see LP), you need to deposit stablecoins.

You can read more about what a stablecoin is here: https://www.coinbase.com/learn/crypto-basics/what-is-a-stablecoin

DAI is a decentralized stablecoin backed by ETH and other assets, created by MakerDAO.

USDC is a token issued by Coinbase and is fully-backed on a 1-to-1 ratio.

USDT is a Tether.io product, the biggest stablecoin on Ethereum to date.

You need to acquire DAI/USDC/USDT in any proportion to deposit into the main stablecoin pool. It's recommended to make a minimum deposit of $1,000, otherwise gas fees will make this unprofitable.

From ETH

This is the easiest way. You need to use any DEX or aggregator: Uniswap, 1inch etc.

From USD

Use your favorite exchange to buy any amount of DAI/USDC/USDT.

From BTC

You need to exchange BTC into DAI/USDC/USDT.

Do I need to provide pairs of coins or just one coin?

You can deposit one coin, or all three. Basically, you can choose which amounts deposit for each coin. Your stablecoins will be converted automatically on deposit, and you will receive SIG-LP tokens indicating your pool share.

For example, if you deposit 1000 DAI, they will be automatically converted to approximately 333 DAI, 333 USDC, 333 USDT and then deposited into the pool to act as a liquidity. The rates and the amount of the pool share you will receive will be shown to you before a transaction.

Deposit

After acquiring stablecoins and putting them in a web3-compatible wallet, visit the Liquidity page.

Here, choose the amount of stablecoins you would like to deposit, and execute the transaction. You will need to sign it in your wallet.

In Metamask, you will see a popup.

After deposit is completed, you will receive SIG LP tokens, approximate to the amount of the dollar value of the assets deposited. You will see the expected amount of SIG LP tokens you will receive before completing the deposit.

SIG LP tokens can be exchanged back to the underlying stablecoins at any time. Stablecoin funds never leave the smart contract normally, but their ratio may fluctuate. When you withdraw, you may receive different proportions of the stablecoins. See the calculations before the transaction on the Liquidity page.

You need SIG LP to earn SIG rewards.

SIG LP is a pool share. Each SIG LP token represents a valid and equal share of a total pool. If you have 100 SIG LP tokens out of the total supply of 10,000, your pool share is 1%. We use "SIG LP" and "pool shares" interchangeably in the document.

Staking

On the Rewards page, you can stake your LP tokens. You have an option to stake SIG/ETH_LP, if you have already received SIG token and have put some liquidity into the SIG/ETH pool on Uniswap.

Please note that SIG/ETH pool is completely different from the xSigma stablecoin pool. It is located on Uniswap and requires both SIG and ETH for you to provide liquidity. Educate yourself on impermanent loss before depositing there. Thus said, most probably SIG/ETH pool will have higher rewards as it will have less liquidity

Choose DAI/USDC/USDT_LP pool and deposit your pool shares. You will see your SIG rewards starting to accumulate.

You can unstake your pool share to withdraw your rewards, or you can press the "Harvest" button to capture the rewards without unstaking.

The longer you keep your shares staked, the more rewards you will receive.