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

Automated Method (Recommended for Large Positions)

Our streamlined process simplifies liquidity provision:

Step 1: Access the Pools Section

1. Navigate to the Pools section in FIVA

2. Select your desired pool (tsTON, sUSDe, Storm LP, etc.)

Step 2: Use the Automated Process

1. Enter the amount of your yield-bearing token you want to provide

2. Click "Add Liquidity"

1. Confirm two transactions:

   1. First to mint PT tokens

   2. Second to establish your LP position

Important Note: The automated process uses the minting route, which means you'll receive YT tokens as a byproduct. These YT tokens will appear in your wallet and can be either held for farming or sold in the market.

Manual Method (For Better Capital Efficiency)

If you want to optimize capital efficiency when there's good liquidity:

Step 1: Prepare Your Tokens You'll need two components:

• Your yield-bearing tokens (like sUSDe, tsTON, or Storm LP)

• PT tokens for the same asset

Step 2: 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 and slippage is low). Buying PT tokens from the pool means you won't receive YT tokens, which can be more capital efficient when liquidity is good.

Step 3: Provide Liquidity Manually Once you have both your yield-bearing tokens and PT tokens:

1. Navigate to the Pools section

2. Select the appropriate pool

3. Enter the amounts of both tokens

4. Complete the transaction

Which Method Should You Choose?

• Automated Method: Best for beginners and those adding significant liquidity who don't mind receiving YT tokens.

• Manual Method: Preferred for capital efficiency optimization when there's good liquidity in the markets and you want to avoid receiving YT tokens.

Step 4: 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.

Summary

By providing liquidity in FIVA's ecosystem, you transform your yield-bearing assets into multi-stream revenue generators. You'll continue receiving your original protocol yields while adding trading fees and FIVA points – all with protection against impermanent loss at maturity.