🪙Trading Liquidity
Liquidity Tokens
Tigris's Liquidity Tokens (LT) are stablecoins pegged to a token and backed by it. They are redeemable 1:1 for the native asset in its respective Liquidity Vault, allowing for a perfectly stable peg. The tokens are aimed at always being very overcollateralized.
Opening a trade on Tigris will automatically deposit the margin into the Liquidity Vault that supports it. When closing the position, the trader will be paid with the respective Liquidity Token.
Tigris currently features these Liquidity Vaults:
| Chain | Token | Liquidity Token |
|---|---|---|
Arbitrum | USDT - WETH | tigUSD - tigETH |
Meter | MTRG | tigMTRG |
Polygon | DAI | tigUSD |
Depending on each Vault collateralization level, trading fees are distributed between Liquidity Tokens and TIG stakers as:
<100%: 70% of fees go to staked LT and 30% to staked TIG;
>100%: 30% of fees go to staked LT and 70% to staked TIG.
Liquidity Vaults act as counterparties to traders. Thus, negative PnL and liquidations help collateralize them, while positive PnL does the opposite.
Swapping
Users can swap any available Liquidity Token to/from a native token in a Liquidity Vault and receive the desired asset at a 1:1 ratio.
Providing Liquidity
Users can swap their native tokens for LTs and stake them in their respective vaults to provide liquidity.
Staked Liquidity Tokens earn 30% of market orders trading fees and 27% of limit/stop orders trading fees. The other 3% is used to incentivize their executions and is paid to execution bots.
Trading fees are paid out in the same Liquidity Token, for example staked tigUSD earns tigUSD from both USDT and tigUSD trades. Fees are specific to each chain.
Pending rewards can be claimed at any moment. Adding Liquidity Tokens to an existing stake will claim pending rewards.
Autocompounding
Stakers can unlock a higher APY by turning on autocompounding, a feature that automatically reinvests earned rewards into their staked holdings.
Every time a trade is executed, rewards are distributed and the price of the autoLT token increases in proportion to the reward amount:
This price appreciation ensures that when stakers withdraw their funds, they receive an increased amount of tigusd compared to their original deposit. This is because the autoLT they have accumulated through compounding has gained value due to the rising price. On Deposit:
On Withdraw:
Withdrawing
Staked Liquidity Tokens have a 7-day withdrawal period. LTs awaiting withdrawal don't earn rewards.
Is possible to withdraw instantly by incurring a 10% penalty on the withdrawn amount.
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