LP - Liquidity Provision

Why Provide Liquidity to FIVA?

FIVA introduces a unique approach to liquidity provision in DeFi. Unlike traditional AMMs that require token pairs, FIVA lets you provide liquidity using just one yield-bearing token – whether it's tsTON, sUSDe, or Storm LP tokens. This means your otherwise idle assets can generate multiple streams of revenue.

When you become a liquidity provider in FIVA, you earn from three sources:

1. Your original protocol yield continues generating returns, some with additional multipliers from our partners

2. Trading fees from market activity in FIVA pools

3. FIVA points that reward long-term liquidity providers

For example, if you're holding sUSDe, you'll continue earning Ethena's base yield while collecting additional rewards from FIVA's ecosystem.

A key advantage of FIVA's liquidity pools is their protection against impermanent loss when held to maturity. This is possible because both tokens in the pair (SY and PT) converge to the same value at maturity, eliminating the primary risk traditional LP positions face.

How to Provide Liquidity: Step-by-Step Guide

FIVA Liquidity Provision Flow

Step 1: Prepare Your Tokens

You'll need two components to provide liquidity:

• SY (Standardized Yield) tokens

• PT (Principal) tokens

Step 2: Get SY Tokens

First, wrap your yield-bearing tokens (like sUSDe or tsTON) into SY tokens through FIVA's Wrap section. This standardized format enables our protocol's advanced features while maintaining your original token's value.

Step 3: Obtain PT Tokens

You have two options for getting PT tokens in Markets Section:

1. Mint them directly (recommended when pool liquidity is low)

2. Buy from existing liquidity pools (more efficient when liquidity exists)

Buying PT tokens from the pool means you won't receive YT tokens, simplifying your position management.

Step 4: Provide Liquidity

Once you have both SY and PT tokens, enter them into the liquidity pool in Pools Section.

Important Note on Process Improvement

While wrapping tokens and minting PT currently requires manual steps, we're developing a "zap" feature that will allow direct entry from underlying assets. This improvement will significantly streamline the liquidity provision process.

Step 5: Monitor Your Position

Track your position through the Dashboard, which shows your current PNL. Note that this PNL display focuses on underlying yield performance and doesn't include protocol points or FIVA points.

Security Measures

We prioritize the safety of your assets through:

• Completed security audit by TonBit [LINK: audit report]

• Ongoing comprehensive audit by Trail of Bits (completing mid-April)

• Integration with Pyth oracles for reliable price feeds

Summary

By following these steps, you can put your yield-bearing assets to work in FIVA's ecosystem, earning multiple revenue streams while maintaining protection against impermanent loss at maturity.