Looking to elevate your DeFi experience? You’ve come to the right place. This all-encompassing guide aims to provide an exhaustive understanding of Single-Sided Liquidity on Concordex. Whether you want to refine or facilitate your liquidity contributions, this is your starting point. Let’s dive in!
What Exactly is Single-Sided Liquidity?
Also referred to as SSL, Single-Sided Liquidity is an innovative approach to engage with liquidity pools. It grants you the luxury of contributing a sole type of asset to a given pool. This is especially advantageous for individuals or projects that predominantly hold one kind of asset and are looking to partake in liquidity provision without altering their current portfolio structure.
How Does It Stand Apart?
Traditional models for liquidity, such as Full-Range and Concentrated Liquidity, often necessitate the inclusion of two diverse assets. This can become an obstacle if your holdings are mainly concentrated in a single asset. SSL comes to the rescue by simplifying the entire procedure, thus making the task of liquidity provision more user-friendly than ever.
The Intricacies of SSL
Within the framework of SSL, your supplied liquidity initially aligns either to the left or the right of the prevailing market price. Essentially, this means your liquidity stays ‘dormant’ until the market conditions shift the spot price into your predefined range.
A Practical Example:
Say you’re primarily invested in Concordium tokens, with only a modest amount of USDC at your disposal. You choose a Single-Sided position in the CCD/USDT liquidity pool, contributing solely to Concordium tokens.
Let’s assume you activate this position when Concordium’s trading value against USDT ranges from $0.05 to $0.1. Your liquidity remains ‘dormant’ initially. However, once the market price ventures into this specific range, your Concordium tokens are automatically converted into USDT, enabling you to accumulate fees.
This approach allows you to earn income while exposing only your Concordium tokens to risk, a valuable strategy if you wish to keep your primary exposure to Concordium while still participating in the liquidity pool.
Comprehending the finer details of Single-Sided Liquidity empowers you to harness its array of advantages fully. Adopting SSL as a part of your interaction with Concordex is more than just a novel feature — it’s a strategic maneuver designed to uplift your experience in the decentralized financial world.
Steps to Establish a Single-Sided Liquidity Position in an Existing Pool
Interested in adding a Single-Sided Liquidity Position to a pre-existing liquidity pool? Here’s a detailed walkthrough:
1. First, visit the ‘Liquidity’ section on the Concordex website and click on the ‘Add liquidity’ option.
2. The standard Add Liquidity window will appear. Here, you need to select the Liquidity Pool to which you’d like to contribute (for example, CCD/USDT).
3. Shift your focus to the ‘Deposit Amount’ area, where you will see various ratio options for your positions. Specifically, look for the Single-Sided options involving either CCD or USDT. You can learn more about the various position types in our recent blog post.
4. After that, input the desired number of CCD or USDC tokens according to your chosen position, adjust the price bounds, choose your Fee Level, and click ‘Confirm adding liquidity.’
Congratulations! You’ve successfully set up your Single-Sided Liquidity position. As highlighted in the interface, Concordex allows contributions even if you input only one type of token (in this case, USDT). Once the Spot Price intersects with your preset liquidity boundaries, you’ll commence receiving fees on each transaction that involves your contributed assets.
Becoming proficient in Single-Sided Liquidity on Concordex has never been simpler. Armed with this extensive guide, you are now fully prepared to tap into the plethora of benefits SSL offers, thereby enriching your voyage through the realm of decentralized finance. Happy returns!