Liquidity Guide

Learn how to provide liquidity on DI Network, earn trading fees, participate in liquidity mining, and manage your liquidity provider positions effectively.

Liquidity Overview

DI Network offers multiple liquidity provision opportunities:

• DEX Liquidity: Provide liquidity to DI/ETH, DI/USDC pairs

• Stability Pool: DUSD liquidity for liquidation absorption

• Cross-Chain Liquidity: Bridge liquidity across networks

• Synthetic Asset Pools: Liquidity for synthetic asset trading

Getting Started

Prerequisites

• Supported wallet (MetaMask, WalletConnect, etc.)

• Tokens for liquidity pairs (DI, ETH, USDC, DUSD)

• Understanding of impermanent loss

• Basic knowledge of AMM mechanics

Choosing Your Strategy

Strategy	Risk Level	Expected Returns	Time Commitment
Stable Pairs	Low	5-15% APY	Low
DI Pairs	Medium	15-40% APY	Medium
Exotic Pairs	High	30-80% APY	High
Stability Pool	Low-Medium	8-26% APY	Low

Liquidity Provision Types

AMM Liquidity Pools

Traditional 50/50 Pools:

• Equal value of two tokens

• Earn trading fees (0.3%)

• Subject to impermanent loss

• Liquidity mining rewards available

Supported Pairs:

• DI/ETH (Primary pair, highest rewards)

• DI/USDC (Stable exposure)

• DI/DUSD (Protocol synergy)

• DUSD/USDC (Stable pair, low IL)

Stability Pool (DUSD)

Mechanism: Single-asset liquidity provision

• Deposit only DUSD

• No impermanent loss

• Earn liquidation bonuses

• Support protocol stability

Liquidity Mining Program

Reward Structure

Total Liquidity Mining Allocation: 300M DI (5 years)

Year 1 Distribution (90M DI):
├── DI/ETH Pool: 36M DI (40%)
├── DI/USDC Pool: 27M DI (30%)
├── DI/DUSD Pool: 18M DI (20%)
└── Other Pools: 9M DI (10%)

APY Calculation

Pool APY = Trading Fees APY + Liquidity Mining APY

Example DI/ETH Pool:
Trading Volume: $1M daily
Pool TVL: $10M
Trading Fee APY: ($1M × 0.003 × 365) / $10M = 10.95%

Liquidity Mining: 36M DI rewards / $10M TVL = 3.6 DI per $ TVL
At $10/DI: 36% APY
Total APY: 10.95% + 36% = 46.95%

Risk Management

Impermanent Loss

Occurs when token prices diverge:

Initial: 1 ETH = $2000, 1 DI = $10
Pool: 100 ETH + 20,000 DI = $400,000

After price change: 1 ETH = $3000, 1 DI = $10
Your share: 81.65 ETH + 24,495 DI = $489,900
Hold strategy: 100 ETH + 20,000 DI = $500,000
Impermanent Loss: $10,100 (2.02%)

Risk Mitigation

• Choose correlated pairs (DUSD/USDC)

• Use hedging strategies

• Focus on high-reward pools

• Monitor positions regularly

Performance Tracking

Key Metrics

LP Performance Dashboard:
- Initial Investment: $10,000
- Current Value: $12,500
- Impermanent Loss: -$200 (-1.6%)
- Fees Earned: $450
- LM Rewards: $2,250
- Net P&L: +$2,500 (25%)
- Annualized Return: 101.4%

Best Practices

Getting Started

• Start with stable pairs to learn

• Begin with small amounts

• Understand IL before large commitments

• Monitor positions regularly

Risk Management

• Never provide more than 20% of portfolio

• Diversify across multiple pools

• Keep emergency funds liquid

• Set IL tolerance limits