# Introducing JewelSwap Introduction to JewelSwap JewelSwap is a DeFi powerhouse, offering a vast array of modules and features, aiming to maximize capital efficiency. JewelSwap is committed to maintaining a leading position in the DeFi Ecosystem by constantly innovating and introducing new modules or enhancements to existing ones. **The JewelSwap Ecosystem stands at the forefront of DeFi innovation on the** * [**MultiversX** ](https://app.jewelswap.io)**Network** * [**Radix** ](https://xrd.jewelswap.io)**Network** * [**SUI**](https://sui.jewelswap.io) **Network** * [**Solana**](https://sol.jewelswap.io) **Network** *** JewelSwap is a multi-blockchain DeFi powerhouse, governed by smart contracts.\ JewelSwap is committed to the safety and security of it's platform and has therefore done [audits of smart contracts](/other-resources/safety-and-security) and offers a [Bug Bounty program](/other-resources/bug-bounty) for white-hat hackers. *** Current modules of JewelSwap include: #### MultiversX * [**NFT Loans**](/multiversx/nft-loan-modules/nft-loans-explained) - Borrow EGLD against your NFTs instantly * [**NFT Mortgages**](/multiversx/nft-loan-modules/nft-mortgage-explained) - Buy NFTs now, pay later * [**NFT AMM and DCA**](/multiversx/nft-amm-dca-modules/introduction-to-nft-amm-dca) - Trade NFT-EGLD pairs | DCA into or out of NFTs * [**Lending pools for NFT Loans and Mortgages**](/multiversx/nft-loan-modules/lending-for-nfts-explained) - Lend EGLD for NFT Loans * [**Staking**](/multiversx/staking-derivatives/introduction-to-staking) - An entire ecosystem of various derivative tokens (both redeemable and unredeemable) * [**Gauge**](/multiversx/staking-derivatives/gauge) **-** JWLEGLD Governance voting mechanism * [**Lending for Farms**](/multiversx/lending-for-farms/lending-for-farms-explained) **-** Lend various assets to be used by leveraged farms * [**Optimized/Boosted/Leveraged Yield Farms**](/multiversx/jewelswap-yield-farming/introduction) - Yield Farming on JewelSwap * **Isolated Money Markets -** Supply assets and borrow against them * **Global Money Markets** - Lend and borrow assets freely * [**Flexiloans** ](/multiversx/flexiloans/flexiloans-introduction)**-** Exclusive loan-program for partners * [**Points** ](/multiversx/jewelswap-points/jewelswap-points-introduction)- Use JewelSwap, earn points #### SUI * [**Staking** ](/sui/derivative-tokens/redeemable-derivatives/jwlsui-liquid-staking)- JWLSUI dual-token liquid staking * [**Gauge** ](/sui/gauge)- JWLSUI Governance voting mechanism #### Radix * [**Staking** ](/radix/jwlxrd-liquid-staking)- JWLXRD dual-token liquid staking #### Solana * [**Staking** ](/solana/jwlsol-liquid-staking)- JWLSOL dual-token liquid staking * [**Gauge** ](/solana/gauge)- JWLSOL Governance voting mechanism *** If you have any questions, feel free to join the [Discord ](https://discord.com/invite/eAaP32ncCb)or [Telegram](https://t.me/JewelSwap). The JewelSwap Team and active community members will gladly assist you with any inquiries. # NFT Loan Modules # NFT Loans: Explained A one-page explanation of how NFT Loans work JewelSwap has built the first decentralized NFT liquidity protocol, supporting **instant NFT-backed loans** on the MultiversX Blockchain Network. These NFT Loans allow users to **borrow EGLD against their NFT**. By depositing their NFT, they can **borrow up to 50% of the NFT's value in EGLD**. [There are a few **exceptions to the 50% borrow limit**.](/multiversx/nft-loan-modules/nft-loans-explained/exceptions-to-the-50-borrow-limit) *** The **borrower** can now keep the loan running by paying the interest on his loan before the due date, or, pay back the entire borrowed amount and any [accrued interest](/multiversx/nft-loan-modules/nfts-interest-plans).\ By paying back all debt, the borrower will receive back the NFT he put up as [collateral](/other-resources/definitions#collateral). If a borrower **does not pay the interest** or the [**Health Factor**](/multiversx/nft-loan-modules/nfts-liquidation#health-factor-hf) **of the Loan becomes bad**, the loan will be cancelled and the NFT will be put up for [liquidation](/other-resources/definitions#liquidate). The [**Health Factor**](/multiversx/nft-loan-modules/nfts-liquidation#health-factor-hf) basically portrays the difference between your borrowed amount and how much the NFT is worth.\ If you borrowed 1 EGLD against an NFT worth 2 EGLD and the NFT loses 25% of value, then your loan became more risky for the platform.\ After all, you now essentially borrowed 1 EGLD against an NFT worth 1.5 EGLD. This means the Health Factor of your Loan went down. If the Health Factor of your Loan goes down too much, you will get liquidated! **To avoid liquidation**, it's best to pay back the entire debt and close the Loan. The liquidation of the NFT will not happen immediatelly.\ [For more information on how the NFT liquidation procedure and the Health Factor works, please read here](/multiversx/nft-loan-modules/nfts-liquidation)**.** *** **Only NFTs from verified collections can be used for NFT Loans and NFT Mortgage.**\ The currently available collections can be found on the [NFT Borrow section](https://app.jewelswap.io/borrow) and the [NFT Mortgage section](https://app.jewelswap.io/mortgage) respectively. [**Start borrowing against your NFT now**](https://app.jewelswap.io/borrow) *** ### **Example:** You deposit an NFT which has a floor-price of 3 EGLD.\ With this NFT, you open a new Loan of 1.5 EGLD (the maximum amount you can borrow - 50% of the value). **You chose the 16 days** [**interest plan**](/multiversx/nft-loan-modules/nfts-interest-plans), which means in 16 days you have to pay at least the interest of the loan, to keep the loan running. You can also decide to pay back the entire debt (borrowed amount + interest) to close the loan and receive back the NFT. Let's say you want to keep the loan going, because you can't pay back the full 1.5 EGLD yet. In this case, you have to pay the accrued interest for your chosen 16 days plan. 4% of 1.5 EGLD: 0.06 EGLD. If you do not pay the accrued interest before the end of the deadline, your loan's collateral will be put up for liquidation. You paid the 0.06 EGLD interest on your loan. Now your loan can continue for another 16 days. Most of the interest payment goes towards the EGLD lenders, while a portion goes to JewelSwap as outlined in the [NFT Loans / Mortgage Fees](broken://pages/5WCpu5KjibGOtUS5W3k2). # Exceptions to the 50% borrow limit There are a few **exceptions to the 50% borrow limit**. [NFTs representing an EGLD-unstaking position ](/other-resources/definitions#unstaking-nfts)on JewelSwap (JWLEGLD) or on Hatom (sEGLD) have higher borrow limits. Their respective **borrow limits are 90%**. This means you can borrow 9 EGLD against an [EGLD-unstaking NFT](/other-resources/definitions#unstaking-nfts) worth 10 EGLD. More exceptions to the 50% borrow limit may be added in the future. * UJWLEGLD NFT: Borrow Limit of 90% * Hatom Unbond NFT: Borrow Limit of 90% # NFT Mortgage: Explained Buy now pay later: NFT Mortgages ### What is a Mortgage? A mortgage is an innovation of JewelSwap, allowing you to buy your favorite NFTs, without having **the total value** of the required price. *** ### How does it work? NFT Mortgages are actually quite similar to [NFT Loans](/multiversx/nft-loan-modules/nft-loans-explained#example). Let's look into how it works. Let's say you want to purchase an NFT that costs 6 EGLD on the open market.\ But you only have 3 EGLD available right now. With NFT Mortgages, **you can borrow the 3 EGLD shortfall** from the [NFT EGLD-lending pool](/multiversx/nft-loan-modules/lending-for-nfts-explained) on JewelSwap and **buy the NFT now**.\ The user selects a payment plan based on the [Interest Plans](/multiversx/nft-loan-modules/nfts-interest-plans) and can open a Mortgage on the NFT. **Now you can see, why this is similar to the NFT Loans**: The user now has a position of 3 EGLD debt (50% of the NFT's value) and the NFT is held as collateral on the platform. This is the same situation as if the user would have opened a 3 EGLD borrow against his NFT. In case the [Health Factor](/multiversx/nft-loan-modules/nfts-liquidation#health-factor-hf) would worsen a lot or the user would miss the interest payments, the Mortgage would get [Liquidated](/multiversx/nft-loan-modules/nfts-liquidation). **Only NFTs from verified collections can be used for NFT Loans and NFT Mortgage.**\ The currently available collections can be found on the [NFT Borrow section](https://app.jewelswap.io/borrow) and the [NFT Mortgage section](https://app.jewelswap.io/mortgage) respectively. [**Start buying NFTs now and paying later**](https://app.jewelswap.io/mortgage) # Lending for NFTs: Explained ### Introduction JewelSwap needs lenders to deposit EGLD into the lending pool, in order to offer NFT Loans and NFT Mortgages to borrowers. Let's go over how lending works from a user's perspective. **Lenders** will receive attractive [APY ](/other-resources/definitions#apy-annual-percentage-yield)for lending their EGLD to borrowers that use the NFT Loans or NFT Mortgage feature.\ Rewards are being collected for 30 days (known as an **epoch**) and paid out after the epoch ended.\ After the epoch ended, lenders will receive their relative share of the generated rewards.\ The user can choose to either compound (also known as reinvest) his rewards, or claim/withdraw the earned EGLD. The shown APY on the Website is calculated based on the rewards accumulated during the epoch. Because the rewards are only distributed after the end of the epoch, it is important to note that **the lender has to stay in the lending pool until the epoch has ended. Otherwise, the lender will not receive any rewards for the ongoing epoch.** *** #### **Lock time** Furthermore, once you deposit EGLD into the lending pool, your deposit is subject to a **21 days lock**. If you deposit any amount of EGLD, you cannot withdraw those EGLD for 21 days.\ After the 21 days passed, you may withdraw them, but be aware, withdrawing your deposit before the end of the epoch means you will earn no rewards for this epoch. Compounding/Reinvesting your EGLD rewards will **not** reset the lock, but depositing more EGLD **will** reset the lock. *** #### Withdrawing **Withdrawing is possible as long as there is enough unborrowed and available liquidity.** Or in other words: You can withdraw once your lock is over and if there is enough EGLD in the lending pool that hasn't been borrowed by anyone yet. Even though only 10% is borrowed for example, the **available liquidity might be lower** due to [**Algorithmic Market Operations**](/multiversx/nft-loan-modules/lending-for-nfts-explained/algorithmic-market-operations). In high withdraw scenarios, available liquidity might be lower, which can lead to users being unable to withdraw until loans have been paid back or EGLD from the [**AMO module**](/multiversx/nft-loan-modules/lending-for-nfts-explained/algorithmic-market-operations)[ ](/multiversx/nft-loan-modules/lending-for-nfts-explained/algorithmic-market-operations)have been unstaked and put back into the lending pool. Please also read the documentation about the AMO module to learn how it works. During times of low available liquidity, you might need to wait another 24 hours, or a few more days before you can withdraw. JewelSwap is committed to enable users to withdraw as fast as possible, when they demand to do so, but due to open loans and the [AMO mechanism](/multiversx/nft-loan-modules/lending-for-nfts-explained/algorithmic-market-operations), a low wait time can occur. *** #### Rewards / Fees 70% of the borrowers interest fees go to the lending rewards Pool, while the other 30% goes to the protocol. *** ### **Managing Risks in Lending EGLD** JewelSwap relies on lenders to deposit EGLD into the lending pool, enabling the platform to provide NFT Loans and NFT Mortgages to borrowers. While lending offers the opportunity for attractive rewards, it's important to acknowledge potential risks, including the possibility of bad debt. If you want to learn more about the risks involved in lending your EGLD for NFT Loans and NFT Mortgages, **you should also read the other pages in the documentation**. By understanding how NFT Loans/Mortgages work, you can assess the risk for yourself. Lenders should be aware that despite the potential for rewards, there is a risk of borrowers not repaying their loans, leading to potential bad debt. [**Start lending EGLD now** ](https://app.jewelswap.io/lend) # Algorithmic Market Operations **Overview:** JewelSwap introduces an innovative approach to decentralized finance with its Algorithmic Market Operations (AMO) framework. This framework is designed to maximize capital efficiency through autonomous, programmable financial strategies, often referred to as 'central banking legos'. **Key Features:** 1. **AMO Controllers:** * AMO Controllers are sophisticated algorithms that perform open market operations. They are designed to dynamically adjust market parameters based on real-time data, ensuring optimal capital utilization. * These controllers increase market efficiency and stability, ensuring that users get the best possible returns on their investments. 2. **Utilization of Idle Lending Assets:** * Concept: In the NFT Lending Liquidity Protocol, idle assets are not merely stored but actively invested. * Implementation: This idle capital is channeled into JewelSwap's EGLD Liquid Staking mechanism, which allows for the generation of reliable yields. * **A dynamic percentage of lent EGLD in the lending pool is allocated to JewelSwap's SJWLEGLD Liquid Staking.** * **This allocation aims to generate additional and stable revenue**, which benefits all lenders in the lending pool. 3. **Reward Distribution:** * **70% of the generated rewards are allocated to the lenders** as an incentive for their participation, while 30% are reinvested into the protocol. # NFTs: Bulk Redeem | Renew | Cashout You have a lot of open loans and want to manage all of them simultaneously? No problem!

"Fee" refers to the interest charges and "Debt" is the borrowed amount.

#### Bulk Redeem Bulk Redemptions allow you to pay outstanding interest plus all the EGLD you borrowed for multiple loans all at once. This is useful if you want to redeem multiple loans at once and get back your NFT collateral. To do so, just click the checkboxes of the loans that you would like to redeem.\ Click the “Redeem” button to redeem all the selected loans.\ You will be asked to pay the accrued interest plus the EGLD you borrowed. In the end, you will receive all the NFTs back. *** #### Bulk Renew Bulk Renew your loans by selecting the loans you want to renew and clicking the “Renew” button. Bulk renew allows you to pay the outstanding interest on multiple loans at once, to keep those loans going until the next interest payment is due. When bulk renewing, you will just need to pay the interest charges displayed (shown as "Fee" on the screenshot). *** #### Bulk Cashout **In short: If your NFT collateral has risen in value, you are able to borrow more EGLD to get back to a 50% borrow rate.** Bulk Cashout your loans by clicking the “Cashout” checkbox (as visible in the screenshot). **If the current market value of the NFT has increased**, you will be entitled to **borrow extra EGLD** when you renew the loan (after deduction of the Interest). **Example:** You borrowed 1 EGLD against an NFT valued at 2 EGLD (**50%** borrow rate). The NFT has risen in it's value to 4 EGLD (**25%** borrow rate). You have outstanding interest charges of 0.04 EGLD.\ If you decide to cashout your NFT Loan, you will have borrowed an extra 0.96 EGLD (2 EGLD borrowed against 4 EGLD NFT - **50%** borrow rate). In this scenario, you already kept your 1 EGLD from your original loan, you paid back the due interest and **took out another loan (combined to the existing loan) against the new valuation of the NFT**.\ Because you still have 1 EGLD from the original loan, you only received 1 more EGLD to get to a 50% borrow rate. (4 EGLD NFT value \* 0.5 (max borrow 50%)) = 2 EGLD\ 2 EGLD - 1 EGLD (from original loan) - 0.04 EGLD (interest due from original loan) = **0.96 EGLD.** **Summary:** After you did the cashout of the loan, you are back to a 50% borrow rate, by borrowing more against the risen value of the NFT and you also paid the outstanding interest charges. # NFTs: Liquidation
### **Loans in Grace Period** Loans that are liquidated due to a **bad Health Factor** or **missed interest payments** will automatically fall into **Graced Period Loans**. Users will have up to **48 hours to redeem** their NFT. Users can redeem the NFT from the Graced Loans section by **paying the loan, the outstanding interest and a liquidation fee of 10%**. Once the Grace Period of 48 hours has expired, the NFTs will be moved to the Liquidated Loans section. **Upon liquidation, the liquidated NFT will be sent to XOXNO for auctioning/selling.** *** ### **Health Factor (HF)** Health factor allows users to easily monitor the health of their loans.\ \ [Health factor: (Floor Price \* Liquidation Threshold) / Debt with Interests.](#user-content-fn-1)[^1] *NFT floor prices are calculated using an inhouse algorithm to avoid manipulation.*\ *For these exact reasons, the way NFT floor prices are calculated cannot and will never be disclosed by JewelSwap.* The Liquidation Threshold is set to 90%. The risk level of the health factor: **HF < 1.0** (**Red**) – Loan will be liquidated and sent to Graced Period Loans.\ **1.0 <= HF <1.5** (**Orange**) – Loan should be carefully monitored.\ **1.5 <= HF** (**Green**)- Loan is in safe zone. *** ### Example A loan that was recently moved to the "Graced Period".\ The user borrowed 1 EGLD against an NFT that was worth 2 EGLD when he opened the loan.5 The user chose the [16 days interest plan ](/multiversx/nft-loan-modules/nfts-interest-plans)at a 4% interest rate payment.\ **After 16 days, the user did not pay the 4% interest payment and therefore, the NFT Loan was put into Grace Period**. The Loan will fall into Grace Period, which means the user has 48 hours time to redeem the NFT by paying back the borrowed funds, the outstanding payments and a 10% liquidation fee (the 10% fee is only on the borrowed amount). 1 EGLD borrowed + 0.04 EGLD interest payment + 10% liquidation fee (0.1 EGLD) = **1.14 EGLD** By paying 1.14 EGLD, the user can immediatelly redeem the NFT, despite the fact that the Loan has been closed. If the user decides not to redeem the NFT within the 48 hour window, the NFT will be sold/auctioned on XOXNO. [^1]: # NFTs: Interest Plans Overview of the NFT Loans and NFT Mortgage interest plans With JewelSwap, borrowing EGLD against your NFT has never been easier.\ Buying an NFT with a downpayment and paying back the rest later also became a possibility! Simply choose from one of the three borrowing payment plans that best fits your needs and start unlocking the world of NFT Loans and NFT Mortgages. * **1 day** - Interest rate: 0.5% (0.5% of the borrowed amount needs to be paid daily) * **3 days** - Interest rate: 1% (1% of the borrowed amount needs to be paid every 3 days) * **7 days** - Interest rate: 2% (2% of the borrowed amount needs to be paid every week) * **16 days** - Interest rate: 4% (4% of the borrowed amount needs to be paid every 16 days) Interest rates are chosen by the JewelSwap platform. # NFTs: Caps and Limits As part of the protocol's risk management measures, the following hard caps are in place: 1. **Maximum EGLD per collection cap that can be lent out** is set at up to 20% of the total reserves in the [Lending Pool](/multiversx/nft-loan-modules/lending-for-nfts-explained), depending on the collection. 2. **Maximum EGLD that can be borrowed per NFT** is set at up to 20 EGLD, depending on the collecton and/or NFT rarity. 3. **Maximum EGLD that can be borrowed by a single wallet** is set at up to 5% of the total reserves in the [Lending Pool](/multiversx/nft-loan-modules/lending-for-nfts-explained). Caps/Limits may be adjusted from time to time, to adapt to the ever changing market. # NFT AMM/DCA Modules # Introduction to NFT AMM/DCA JewelSwap introduces an innovative [Automated Market Maker (AMM)](/other-resources/definitions#automated-market-maker-amm) model specifically designed for an NFT marketplace, aimed at enhancing both liquidity and the overall trading experience for NFTs. **The platform allows users to trade and exchange NFTs** efficiently, employing liquidity pools in a manner akin to cryptocurrency trading on [standard DEXs](/other-resources/definitions#decentralized-exchange-dex). **Users have the ability to trade and exchange NFTs using liquidity pools through JewelSwap**, similar to how one would trade and exchange cryptocurrencies on a regular [DEX](/other-resources/definitions#decentralized-exchange-dex). A standout feature of JewelSwap is the integration of [Dollar Cost Averaging (DCA)](/other-resources/definitions#dollar-cost-averaging-dca) in [buy/sell transactions](/multiversx/nft-amm-dca-modules/single-sided-liquidity-pools-explained). This approach strategically spreads out the purchase or sale of NFTs over time, reducing investment risk by minimizing the impact of volatility in NFT prices. The AMM system in JewelSwap is pivotal in increasing immediate liquidity for NFTs, simplifying the process for users to swiftly buy or sell their assets. **The platform offers a user experience similar to token swapping on platforms like Uniswap, xExchange, or Ashswap.** However, JewelSwap uniquely enables users to swap and trade NFTs, supporting both [**single-side**](/multiversx/nft-amm-dca-modules/single-sided-liquidity-pools-explained) **and** [**two-sided** ](/multiversx/nft-amm-dca-modules/two-sided-liquidity-pools-explained)**liquidity pools**. The latter is particularly beneficial for market makers who wish to provide liquidity and earn trading fees. The [**two-sided pools**](/multiversx/nft-amm-dca-modules/two-sided-liquidity-pools-explained) allow classic liquidity provision so that other users can trade NFT<>EGLD trading pairs. The [**sigle-sided pools**](/multiversx/nft-amm-dca-modules/single-sided-liquidity-pools-explained) allow users to set up buy/sell pools, which are the ideal solution for DCAing into or out of NFTs. These pools do **not** suffer from [impermanent loss](/multiversx/nft-amm-dca-modules/risks-impermanent-loss). **Some of the key features of JewelSwap's NFT AMM DEX are:** * A minimal platform trading fee of 1%. This fee is deducted from the profits of the [pool creator](/multiversx/nft-amm-dca-modules/two-sided-liquidity-pools-explained). **This means the 1% trading fee is not on the volume traded, but merely deducted from the revenue of the pool creator!** * [Flexible DCA buy/sell options](/multiversx/nft-amm-dca-modules/single-sided-liquidity-pools-explained), where users can set their own [bonding curve](/other-resources/definitions#bonding-curve) parameters. This feature allows users to automate their investment strategy according to predetermined price levels, enabling a more customized and potentially more profitable investment experience. * The opportunity to earn EGLD, as trading fees for participating in [two-sided liquidity pools](/multiversx/nft-amm-dca-modules/two-sided-liquidity-pools-explained). This incentivizes users to contribute to the market's liquidity, by **becoming a market marker**, fostering a more robust and efficient trading environment. [Users can create their own pool](/multiversx/nft-amm-dca-modules/two-sided-liquidity-pools-explained) with fully customizable fees and [bonding curve](/other-resources/definitions#bonding-curve). # Two-sided Liquidity Pools Explained JewelSwap's system allows market makers to add liquidity on both buy and sell sides for the Automated Market Maker (AMM). Here's a simple breakdown of how it works: 1. **Setting Up a Two-Sided Liquidity Pool** * Market makers can create a pool that includes both buy and sell orders. For example, you could set up a pool with 10 orders to buy and 10 NFTs available to sell. 2. **Customizing the Trading Fee** * One of the key features of JewelSwap is that **you, as the pool creator, can set your own trading fee**. This **fee is a percentage of each transaction** that occurs in your pool, **adding to your revenue** as a liquidity provider. 3. [**Delta** ](/other-resources/definitions#delta-in-trading)**and Its Impact** * A key feature is the '[delta](/other-resources/definitions#delta-in-trading),' which is set at a certain percentage or amount, say 5% or 0.1 EGLD. **The delta affects how the price of NFTs changes in the pool after a trade happened.** * If you set a higher delta, like 10% or 0.3 EGLD, there will be more significant price changes. * A lower delta, like 2% or 0.04 EGLD, means smaller price changes and *potentially* higher volumes. * **A delta** does not have to be exponential (percentage based) but **can also be linear**. In this case, **you could set that buying or selling an NFT will change the pool's price by 0.1 EGLD**. 4. **Price Adjustment Mechanism** * When an NFT is bought **from** your pool, the number of NFTs you provided in the pool have decreased, and the price for the next NFT buy order rises by your set [delta](/other-resources/definitions#delta-exponential-in-trading) value (e.g., 5% or 0.05 EGLD). * Conversely, when an NFT is sold **into** your pool, your number of NFTs increases, and the price for the next NFT buy order goes down by the delta value (e.g., 5% or 0.05 EGLD). In the extreme case, you will end up being **EGLD rich or NFT rich**. This is also called [**Impermanent Loss**](/multiversx/nft-amm-dca-modules/risks-impermanent-loss). [**Start creating pools now**](https://app.jewelswap.io/create-pool) *** ### **Example of Setting Up and Managing a Two-Sided Liquidity Pool on JewelSwap:** Imagine you are a market maker on JewelSwap and you want to set up a two-sided liquidity pool with NFTs. Here's a step-by-step example: 1. **Initial Setup:** * You start by depositing (e.g.) 10 unique NFTs into the pool, each initially valued at 3 EGLD. * Alongside the NFTs, you also place buy orders for 10 more NFTs, setting up a balanced two-sided pool. **Your pool contains 10 NFTs now (market value each at 3 EGLD) and the other side consists of 30 EGLD.** 2. **Setting the Delta and Trading Fee:** * You decide on a [**delta**](/other-resources/definitions#delta-exponential-in-trading) **exponential** of, for example, 5%. This means after each buy or sell, the price of the next NFT will adjust by 5% (up or down, depending on buy or sell). * As the liquidity provider and pool creator, you also chose a 2% trading fee. 3. **Trading Activity and Price Adjustments:** * When a buyer purchases an NFT, the price for the next NFT would be 3 EGLD ([spot price](/other-resources/definitions#spot-price)) + 0.15 EGLD (5% [delta](/other-resources/definitions#delta-exponential-in-trading)) + 0.063 EGLD (2% custom fee by pool creator) = **3.213 EGLD**. * Conversely, if someone sells an NFT into your pool, your pool's NFT count increases, and the price for the next purchase order will decrease. The delta (price impact) of the sell has moved the purchase price to 2.85 EGLD. Since there is also a 2% fee on the pool, the actual purchase price would be **2.907 EGLD**. 4. **Ongoing Management:** * As trades occur, you monitor the pool, adjusting the delta or adding/removing NFTs as needed to maintain liquidity and desired price levels. 5. **Impact of Market Conditions:** * If the market is **bullish**, and more users are buying NFTs, the price for NFTs in your pool might steadily increase, leading to a higher EGLD balance. * In a **bearish** market, with more users selling NFTs, you may accumulate more NFTs at gradually lower prices. # Single-sided Liquidity Pools Explained Single-sided Liquidity Pools are the ideal way for users to DCA into or out of NFTs.\ By setting [linear or exponential deltas](/other-resources/definitions#delta-in-trading) and providing either EGLD or NFTs for their pool, they can start automatic DCAs for NFTs. *** ### B**uy Pool Creation** Creating a buy pool allows users to place multiple buy bids. For example, you could set up a buy pool with 5 bids, beginning at a spot price of 5 EGLD, using an [exponential delta](/other-resources/definitions#delta-in-trading) of 10%. The [AMM ](/other-resources/definitions#automated-market-maker-amm)system will automatically arrange the 5 buy bids at prices of 5 EGLD, 4.5 EGLD, 4.05 EGLD, 3.645 EGLD, and 3.2805 EGLD. Each subsequent bid is 10% less than the previous one, aligning with the exponential delta. Context: It's called a buy pool, because you, the pool creator, want to buy NFTs. This is great for DCAing into NFTs. *** ### **Setting Up a Sell Pool** In a sell pool, users can offer a set number of NFTs for sale. For instance, a sell pool with 5 NFTs can start at a spot price of 5 EGLD, with a [linear delta](/other-resources/definitions#delta-in-trading) of 0.5 EGLD. The AMM will set up the sell orders for the 5 NFTs at incremental prices of 5 EGLD, 5.5 EGLD, 6 EGLD, 6.5 EGLD, and 7 EGLD. The price will adjust upwards only after each NFT is sold, following the linear delta pattern. Context: It's called a sell pool, because you, the pool creator, want to sell NFTs. This is great for DCAing out of NFTs. *** ### **Ease of Buy/Sell Pool Management** These single-sided pools, whether for buying or selling, simplify the trading process for your NFTs. They allow for flexible control over pricing and ensure that your assets are traded systematically, according to the predefined parameters of the pool. *** ### **Example: Managing a Buy Pool** Imagine you're setting up a buy pool for NFTs. You deposit enough EGLD to cover 5 bids, starting at 5 EGLD. The AMM will place these bids decreasing by 10% each time, allowing you to potentially purchase NFTs at lower prices if the market conditions favor buyers. *** ### **Example: Managing a Sell Pool** For a sell pool, if you have 5 NFTs to sell starting at 5 EGLD, the AMM will list them at gradually increasing prices. This means the first NFT is listed at 5 EGLD, and if it's sold, the next one is listed at 5.5 EGLD, and so on. This strategy can maximize your returns if demand for your NFTs increases. *** ### Summary In summary, single-sided liquidity pools on JewelSwap offer a structured and user-friendly approach to NFT trading, allowing market participants to strategize their buys and sells with precision. **These buy and sell pools are ideal ways of DCAing into or out of NFTs.** # Risks - Impermanent Loss When you participate in a liquidity pool by providing assets like NFTs and EGLD, you're exposed to a risk known as 'impermanent loss' (IL). This term refers to the potential decrease in value of your assets when used in a liquidity pool compared to simply holding them. Here's how it works: 1. **What is Impermanent Loss?** * Impermanent loss occurs due to the price fluctuation of your assets after they are deposited in the pool. For example, if you deposit NFTs and EGLD, and the price of NFTs increases afterwards, the pool automatically rebalances its holdings. * This rebalancing can lead to a situation where the value of your share in the pool is less than what you would have if you had just held onto your NFTs and EGLD separately. 2. **Earning from Trading Fees:** * Despite the risk of impermanent loss, liquidity providers (LPs) earn revenue from trading fees generated in the pool. These fees are a reward for providing liquidity and facilitating trades. * The key to profiting as an LP is to earn enough in trading fees to offset any potential impermanent loss. 3. **Balancing Risk and Reward:** * As a LP, you need to weigh the risk of impermanent loss against the potential earnings from trading fees. In some cases, the fees can compensate for the loss in asset value, leading to an overall profit. * It's important to monitor the market and understand that the risk of impermanent loss is higher in volatile market conditions. In an ideal scenario where no impermanent loss occurs, liquidity providers (LPs) would only earn revenue from the trading fees. However, LPs can still make a profit even with impermanent loss as long as the amount lost is less than the fees earned. *** ### In very simple words: The risk of impermanent loss in AMM is when you provide your NFTs and EGLD to a liquidity pool instead of holding them. If the NFT price goes up, the liquidity pool may rebalance and you may not earn as much as if you had just held onto your NFTs. # Staking / Derivatives # Introduction to Staking JewelSwap's innovative derivatives are of wide variety. JewelSwap introduced two distinct staking models for it's derivatives to accomondate for the different markets and possibilities that exist, using the underlying asset. # Derivative Tokens ### Overview Derivatives are a common concept in traditional finance (TradFi) and decentralized finance (DeFi). A derivative token creates a secondary market for an asset, that would otherwise not exist. JewelSwap is using derivatives to bring new possibilities to MultiversX, such as revenue sharing from different modules, access to new markets and new investment opportunities. *** ### Basic Mechanism: Generic Explanation 1. **Initial Deposit - Minting** * **Primary Token**: Users deposit a primary token (e.g., ASH). The primary token is being staked/locked or sent to a protocol to earn rewards. * In return, they receive a **derivative token** (e.g., JWLASH) on a 1:1 ratio with the deposited primary asset. 2. **Earning Rewards - Staking** * To earn staking rewards, users then stake their derivative tokens on JewelSwap. * **Any derivative tokens not being staked thus increase the rewards for those who do stake their derivative tokens.** * For some tokens, users will receive a liquid-staked token that represents their staking position (e.g. **S**JWLUSD). This token grows in value relative to JWLUSD. 3. **APR Calculation - Rewards** * The **APR** for staking is dynamic and **depends on the underlying revenue source and possibly also of the underlying JewelSwap module.** * If less revenue is generated by the staked/locked "primary tokens", subsequently the APR for stakers will be lower as well. * If less revenue is generated by the JewelSwap module utilizing the derivative token, less rewards for stakers are generated as well. * **For more information how the revenue is generated for a specific derivative, check the derivative's docs page.** * The fewer derivative tokens are being staked, the higher the APR. * Not all primary tokens are used for revenue generation. Some are used for liquidity provision. To learn more about this, check out the individual docs page for the JWL-token you are interested in and the [POL](/other-resources/definitions/jewelswap-protocol-owned-liquidity-pol) [mechanism](/other-resources/definitions/jewelswap-protocol-owned-liquidity-pol). 4. **Unstaking** * Unstaking the derivatives from JewelSwap can happen anytime after the initial wait time has passed. * Example: You deposit JWLASH into staking on JewelSwap. You may not unstake the JWLASH for the next 7 days. After these 7 days have passed, you can keep them in staking or unstake them at **any time**. * Each derivative has a different unstaking mechanism. Some take 7 days to unstake, some have a lock period, some have a 10 day unstaking time - to find out for the specific derivative you are interested in, check it's specific docs page. 5. **Redemption** * Not all derivative tokens can be redeemed for their backing. Check the docs page of the specific derivative you are interested in. * The derivative tokens are sorted by "redeemable" and "non redeemable" in the menu. Please make sure to read the derivatives docs page and check the availability of redeemability. * To redeem a token, it must not be staked. A staked token cannot be redeemed. So to redeem a token, you first have to unstake it. * The unbonding period varies between the redeemable derivatives. Please check the unbonding duration of the derivative you are interested in, in it's docs page. # Redeemable Derivatives # S/JWLEGLD #### **Minting** JWLEGLD is a derivative token that can be minted using EGLD. JWLEGLD **can** make use of [POL](/other-resources/definitions/jewelswap-protocol-owned-liquidity-pol) by minting 1.1 JWLEGLD per deposited EGLD. ***This does not mean JWLEGLD is not 1:1 backed.*** JWLEGLD **is 1:1 backed**. Please read up on how [POL](/other-resources/definitions/jewelswap-protocol-owned-liquidity-pol) works, what it does, and how the backing is ensured. *** #### **Staking** Staking JWLEGLD will give the user SJWLEGLD, which is appreciating in value against JWLEGLD every day after MultiversX epoch change. The EGLD used to mint JWLEGLD are staked across multiple validators on MultiversX. The staked EGLD generate rewards during the day. The rewards are paid out at the end of each blockchain epoch. Therefore, the ratio between SJWLEGLD and JWLEGLD rises once a day, after the end of each epoch. SJWLEGLD can be transferred between wallets too. This allows you to transfer your ownership to another wallet, without having to unstake your SJWLEGLD. *** [**Gauge** ](/multiversx/staking-derivatives/gauge)**mechanism** Most of the primary tokens used to mint JWLEGLD (in accordance with [POL](/)) are being delegated to various whitelisted validators to earn rewards. The [Gauge mechanism](/multiversx/staking-derivatives/gauge) decides which validator gets more EGLD delegated towards him. Staked [JWLASH ](/multiversx/staking-derivatives/introduction-to-staking/derivative-tokens/unredeemable-derivatives/jwlash)is eligible for voting on [Gauge ](/multiversx/staking-derivatives/gauge)governance. *** #### **Rewards** Rewards for JWLEGLD staking stem from these sources: * EGLD used to mint JWLEGLD is staked at various staking providers on MultiversX to generate yield. * Any fees from the [unbonding/redemption mechanism](#redemption-unbonding-unbonding-nft-redemption-fees) go towards SJWLEGLD as well. *** #### **Unstaking** Unstaking SJWLEGLD for JWLEGLD is possible **instantly** and at no fees. *** #### Swapping You can swap JWLEGLD at varying market rates on Ashswap. *** #### **Redemption/Unbonding - Unbonding NFT - Redemption Fees** JWLEGLD is redeemable in a 1:1 ratio for normal EGLD.\ The unbonding period for JWLEGLD is [epochs ](/other-resources/definitions#epoch)(unbonding time).\ 10 epochs is usually 10 days on the MultiversX network. [See Epochs.](/other-resources/definitions#epoch) When unbonding, you receive an NFT from JewelSwap. **UJWLEGLD NFT**\ This is a so-called [**unstaking/unbonding NFT**](/other-resources/definitions#unstaking-unbonding-nfts)**.**\ You can use this NFT to send it to a different wallet, trade it on NFT Marketplaces or [take a loan against it](/multiversx/nft-loan-modules/nft-loans-explained).\ You need the NFT (which is essentially a receipt) to claim your assets after the unbonding time passed. The NFT proofs your ownership of the unbonding assets. **Most of the time, there are no fees associated with redeeming JWLEGLD.**\ A dynamic fee mechanism may decide to start charging a small fee when redeeming JWLEGLD.\ This mechanism adds a redemption fee **in case of high redemption requests**. This is to prevent bank-run scenarios, protect leveraged farms from forced closure, protect JWLEGLD LP liquidity, allow liquidity to be removed from [POL](/other-resources/definitions/jewelswap-protocol-owned-liquidity-pol) if needed and also stabilize the SJWLEGLD APR.\ The intention of this mechanism is solely to protect users and the stability of the ecosystem. All collected fees of this mechanism go to the stakers.
More Information on the JWLEGLD dynamic fees redemption mechanism If many redemptions are happening at the same time or the volume of the redemptions is high, the ratio between existing stable tokens and staked stable tokens will quickly diminish. This in turn will make the APR of SJWLEGLD fall very quickly. Furthermore, a high influx of redemption requests can lead to the forced closure of many leveraged yield farms, utilizing JWLEGLD. Assuming JewelSwap has to force close a lot of leveraged farms that utilize JWLEGLD, the following might happen: * Lost assets due to swap fees and slippage when closing the farm * This impacts the farmer, since he did not want to close the farm and now it had to be closed and some of his profit was eaten by swap fees and slippage * Liquidity in the affected Liquidity Pool is now lower * Depending on how many leveraged positions had to be closed, liquidity could be impacted significantly * Which increases slippage when swapping and affects all other liquidity providers as well * Price changes may lead to liquidation * Because of the forced closure of some leveraged farms, other farmers that did not have their farm closed may see themselves closer to a point of liquidation * Or in the worst case, their farm has to be liquidated because of the forced-closure of the other farms To prevent these scenarios, a dynamic fee may be put into place by the system to disincentivize mass-redemptions to protect stakers, farmers and prevent bank runs.
*** #### **Fees** 10% of the generated rewards from EGLD staking are kept by JewelSwap. 90% are going to SJWLEGLD. # S/JWLUSD #### **Minting** JWLUSD is a derivative token that can be minted using either USDC, USDT or DAI. JWLUSD **can** make use of [POL ](/other-resources/definitions/jewelswap-protocol-owned-liquidity-pol)by minting 1.1 JWLUSD per deposited stablecoin. ***This does not mean JWLUSD is not 1:1 backed.*** JWLUSD **is 1:1 backed**. Please read up on how [POL](/other-resources/definitions/jewelswap-protocol-owned-liquidity-pol) works, what it does, and how the backing is ensured. *** #### **Staking** Staking JWLUSD will give the user SJWLUSD, which is appreciating in value against JWLUSD multiple times per day. The stablecoins used to mint JWLUSD are being deposited into the [Hatom Money Market](https://app.hatom.com/lend). The lent and collateral activated stablecoins generate rewards. Unlike SJWLEGLD, which gets its revenue from EGLD staking that is only being paid out once per epoch/day, SJWLUSD appreciates in value more frequently.\ The rewards from lending + collateral activation on Hatom are being accounted for in the SJWLUSD-JWLUSD ratio multiple times per day. SJWLUSD can be transferred between wallets too. This allows you to trasnfer your ownership to another wallet, without having to unstake your SJWLUSD. *** #### **Rewards** Rewards for JWLUSD staking stem from these sources: * The assets used to mint JWLUSD are deposited into Hatom Money Markets (and if possible, collateral activated) to generate yield. * Any fees from the [redemption mechanism](#redemption-unbonding-unbonding-nft-redemption-fees) go towards SJWLUSD as well. *** #### **Unstaking** Unstaking SJWLUSD for JWLUSD is possible **instantly** and at no additional fees. *** #### Swapping You can swap JWLUSD at varying market rates on Ashswap.\ If the price of JWLUSD is below it's intrinsic value, it may make sense to [arbitrage ](/other-resources/definitions#arbitrage)the price difference. *** #### **Redemption/Unbonding - Unbonding NFT - Redemption Fees** JWLUSD is redeemable in a 1:1 ratio for it's backing.\ This means, upon redemption, you will receive a mix of stablecoins.\ Example: If the current backing of JWLUSD consists of 40% USDC, 30% USDT and 30% DAI, when you redeem $100 JWLUSD, you will receive $40 USDC, $30 USDT and $30 DAI. The unbonding period for JWLUSD is 10 [epochs ](/other-resources/definitions#epoch)(unbonding time).\ 10 epochs is usually 10 days on the MultiversX network. [See Epochs.](/other-resources/definitions#epoch) When unbonding, you receive an NFT from JewelSwap. **UJWLUSD NFT**\ This is a so-called [**unstaking/unbonding NFT**](/other-resources/definitions#unstaking-unbonding-nfts)**.**\ You can use this NFT to send it to a different wallet, trade it on NFT Marketplaces or [take a loan against it](/multiversx/nft-loan-modules/nft-loans-explained).\ You need the NFT (which is essentially a receipt) to claim your assets after the unbonding time passed. The NFT proofs your ownership of the unbonding assets. **Most of the time, there are no fees associated with redeeming JWLUSD.**\ A dynamic fee mechanism may decide to start charging a small fee when redeeming JWLUSD.\ This mechanism adds a redemption fee **in case of high redemption requests**. This is to prevent bank-run scenarios, protect leveraged farms from forced closure, protect JWLUSD LP liquidity, allow liquidity to be removed from [POL](/other-resources/definitions/jewelswap-protocol-owned-liquidity-pol) if needed and also stabilize the SJWLUSD APR.\ The intention of this mechanism is solely to protect users and the stability of the ecosystem. All collected fees of this mechanism go to the stakers.
More Information on the JWLUSD dynamic fees redemption mechanism If many redemptions are happening at the same time or the volume of the redemptions is high, the ratio between existing stable tokens and staked stable tokens will quickly diminish. This in turn will make the APR of SJWLUSD fall very quickly. Furthermore, a high influx of redemption requests can lead to the forced closure of many leveraged yield farms, utilizing JWLUSD. Assuming JewelSwap has to force close a lot of leveraged farms that utilize JWLUSD, the following might happen: * Lost assets due to swap fees and slippage when closing the farm * This impacts the farmer, since he did not want to close the farm and now it had to be closed and some of his profit was eaten by swap fees and slippage * Liquidity in the affected Liquidity Pool is now lower * Depending on how many leveraged positions had to be closed, liquidity could be impacted significantly * Which increases slippage when swapping and affects all other liquidity providers as well * Price changes may lead to liquidation * Because of the forced closure of some leveraged farms, other farmers that did not have their farm closed may see themselves closer to a point of liquidation * Or in the worst case, their farm has to be liquidated because of the forced-closure of the other farms Moreover, while Hatom's lending protocol has dynamically rising borrow fees to disincentivize a high utilization rate of lent funds, we need to ensure that we can withdraw enough stablecoins from lending, when needed. Extreme market scenarios with extremely high utilization rates of stablecoins on Hatom are rather rare, but possible. By putting more stress onto Hatom's lending protocol by withdrawing large sums of stablecoins during these market scenarios, we are not helping the situation. To prevent these scenarios, a dynamic fee may be put into place by the system to disincentivize mass-redemptions to protect stakers, farmers and prevent bank runs.
*** #### **Fees** 30% of the generated rewards from stablecoin lending are kept by JewelSwap. 70% are going to SJWLUSD. # JWLHTM #### **Minting** JWLHTM is a derivative token that can be minted using HTM. JWLHTM **can** make use of [POL](/other-resources/definitions/jewelswap-protocol-owned-liquidity-pol)[ ](/other-resources/definitions/jewelswap-protocol-owned-liquidity-pol)by minting 1.3 JWLHTM per deposited HTM. ***This does not mean JWLHTM is not 1:1 backed.*** JWLHTM **is 1:1 backed**. Please read up on how [POL](/other-resources/definitions/jewelswap-protocol-owned-liquidity-pol) works, what it does, and how the backing is ensured. *** #### **Staking** Staking JWLHTM on JewelSwap will give the user more JWLHTM. Rewards are paid out based on a 7-day epoch.\ This means that rewards are being accumulated for 7 days, and after this 7-day-epoch, the rewards are paid out to the stakers, relative to their staked amount. *** **Rewards** Rewards for JWLHTM staking stem from these sources: * Modules where JewelSwap utilizes Hatom (in particular the HTM Tokens), 15% of user-generated rewards (which are in USDC) are used to buy JWLHTM, which is ultimately given to stakers. *** #### **Unstaking** Unstaking JWLHTM from staking is possible after the initial lock up period has passed.\ When you first stake JWLHTM, it is locked for 7 days. **After these 7 days have passed**, **you can** keep your JWLHTM in staking or **remove it from staking at any time, instantly**. If you deposit more JWLHTM or reinvest your rewards by depositing them again, the lock will reset. *** #### Swapping You can swap JWLHTM at varying market rates on Ashswap.\ If the price of JWLHTM is below it's intrinsic value, it may make sense to [arbitrage ](/other-resources/definitions#arbitrage)the price difference. *** **Redemption** JWLHTM is redeemable 1:1 for HTM. When unbonding, you receive an NFT from JewelSwap. **UJWLHTM NFT**\ This is a so-called [**unstaking/unbonding NFT**](/other-resources/definitions#unstaking-unbonding-nfts)**.**\ You can use this NFT to send it to a different wallet, trade it on NFT Marketplaces or [take a loan against it](/multiversx/nft-loan-modules/nft-loans-explained).\ You need the NFT (which is essentially a receipt) to claim your assets after the unbonding time passed. The NFT proofs your ownership of the unbonding assets. The redemption period is 90 [epochs ](/other-resources/definitions#epoch)(unbonding time).\ 90 epochs is usually 90 days on the MultiversX network. [See Epochs.](/other-resources/definitions#epoch)\ \ During 80 of those 90 epochs, the user will earn a fixed 3% APR. After the 90 epochs have passed, the user gets 1:1 HTM (plus the 3% APR) and the JWLHTM are burned by the protocol. The reason for the 10 epochs , where no rewards are given out, is that the HTM tokens need to be unstaked by JewelSwap, and tokens earn no rewards during the unbonding period.
Example
JWLHTM being redeemed1000
APR3%
Rewards per day0,0082191%
80 days rewards0,6575342%
Interest earned6.575342
Total Received after Unbonding1006.575342
# JWLBTC #### **Minting** JWLBTC is a derivative token that can be minted using BTC. JWLBTC **can** make use of [POL](/other-resources/definitions/jewelswap-protocol-owned-liquidity-pol)[ ](/other-resources/definitions/jewelswap-protocol-owned-liquidity-pol)by minting 1.1 JWLBTC per deposited BTC. ***This does not mean JWLBTC is not 1:1 backed.*** JWLBTC **is 1:1 backed**. Please read up on how [POL](/other-resources/definitions/jewelswap-protocol-owned-liquidity-pol) works, what it does, and how the backing is ensured. *** #### **Staking** Staking JWLBTC on JewelSwap will give the user more JWLBTC. Rewards are paid multiple times per day. *** **Rewards** Rewards for JWLBTC staking stem from these sources: * The BTC deposited by users is deployed into Hatom and JewelSwap Money Markets (and collateral activation if possible) to generate yield. *** #### **Unstaking** Unstaking JWLBTC can happen immediatelly. JWLBTC can be unstaked without lockup. *** #### Swapping You can swap JWLBTC at varying market rates on Ashswap.\ If the price of JWLBTC is below it's intrinsic value, it may make sense to [arbitrage ](/other-resources/definitions#arbitrage)the price difference. *** **Redemption** JWLBTC is redeemable 1:1 for BTC. Redeeming JWLBTC for BTC takes 10 [epochs ](/other-resources/definitions#epoch)(unbonding time).\ 10 epochs is usually 10 days on the MultiversX network. [See Epochs.](/other-resources/definitions#epoch) When unbonding, you receive an NFT from JewelSwap. **UJWLBTC NFT**\ This is a so-called [**unstaking/unbonding NFT**](/other-resources/definitions#unstaking-unbonding-nfts)**.**\ You can use this NFT to send it to a different wallet, trade it on NFT Marketplaces or [take a loan against it](/multiversx/nft-loan-modules/nft-loans-explained).\ You need the NFT (which is essentially a receipt) to claim your assets after the unbonding time passed. The NFT proofs your ownership of the unbonding assets. # JWLETH #### **Minting** JWLETH is a derivative token that can be minted using ETH. JWLETH **can** make use of [POL](/other-resources/definitions/jewelswap-protocol-owned-liquidity-pol)[ ](/other-resources/definitions/jewelswap-protocol-owned-liquidity-pol)by minting 1.1 JWLETH per deposited ETH. ***This does not mean JWLETH is not 1:1 backed.*** JWLETH **is 1:1 backed**. Please read up on how [POL](/other-resources/definitions/jewelswap-protocol-owned-liquidity-pol) works, what it does, and how the backing is ensured. *** #### **Staking** Staking JWLETH on JewelSwap will give the user more JWLETH. Rewards are paid multiple times per day. *** **Rewards** Rewards for JWLETH staking stem from these sources: * The ETH deposited by users is deployed into Hatom and JewelSwap Money Markets (and collateral activation if possible) to generate yield. *** #### **Unstaking** Unstaking JWLETH can happen immediatelly. JWLETH can be unstaked without lockup. *** #### Swapping You can swap JWLETH at varying market rates on Ashswap.\ If the price of JWLETH is below it's intrinsic value, it may make sense to [arbitrage ](/other-resources/definitions#arbitrage)the price difference. *** **Redemption** JWLETH is redeemable 1:1 for ETH. Redeeming JWLETH for ETH takes 10 [epochs ](/other-resources/definitions#epoch)(unbonding time).\ 10 epochs is usually 10 days on the MultiversX network. [See Epochs.](/other-resources/definitions#epoch) When unbonding, you receive an NFT from JewelSwap. **UJWLETH NFT**\ This is a so-called [**unstaking/unbonding NFT**](/other-resources/definitions#unstaking-unbonding-nfts)**.**\ You can use this NFT to send it to a different wallet, trade it on NFT Marketplaces or [take a loan against it](/multiversx/nft-loan-modules/nft-loans-explained).\ You need the NFT (which is essentially a receipt) to claim your assets after the unbonding time passed. The NFT proofs your ownership of the unbonding assets. # JWLTAO #### **Minting** JWLTAO is a derivative token that can be minted using TAO. JWLTAO **can** make use of [POL](/other-resources/definitions/jewelswap-protocol-owned-liquidity-pol)[ ](/other-resources/definitions/jewelswap-protocol-owned-liquidity-pol)by minting up to 1.3 JWLTAO per deposited TAO. ***This does not mean JWLTAO is not 1:1 backed.*** JWLTAO **is 1:1 backed**. Please read up on how [POL](/other-resources/definitions/jewelswap-protocol-owned-liquidity-pol) works, what it does, and how the backing is ensured. *** #### **Staking** Staking JWLTAO on JewelSwap will give the user more JWLTAO. Rewards are paid multiple times per day. *** **Rewards** Rewards for JWLTAO staking stem from these sources: * The TAO deposited by users is deployed into Hatom Money Markets (and collateral activation if possible) to generate yield. *** #### **Unstaking** Unstaking JWLTAO can happen immediatelly. JWLTAO can be unstaked without lockup. *** #### Swapping You can swap JWLTAO at varying market rates on Ashswap. *** **Redemption** JWLTAO is redeemable 1:1 for TAO. Redeeming JWLTAO for TAO takes 10 [epochs ](/other-resources/definitions#epoch)(unbonding time).\ 10 epochs is usually 10 days on the MultiversX network. [See Epochs.](/other-resources/definitions#epoch) When unbonding, you receive an NFT from JewelSwap. **UJWLTAO NFT**\ This is a so-called [**unstaking/unbonding NFT**](/other-resources/definitions#unstaking-unbonding-nfts)**.**\ You can use this NFT to send it to a different wallet, trade it on NFT Marketplaces or [take a loan against it](/multiversx/nft-loan-modules/nft-loans-explained).\ You need the NFT (which is essentially a receipt) to claim your assets after the unbonding time passed. The NFT proofs your ownership of the unbonding assets. # JWLAPUSDC #### **Minting** JWLAPUSDC is a derivative token that can be minted using APUSDC. JWLAPUSDC **can** make use of [POL](/other-resources/definitions/jewelswap-protocol-owned-liquidity-pol)[ ](/other-resources/definitions/jewelswap-protocol-owned-liquidity-pol)by minting up to 1.3 JWLAPUSDC per deposited APUSDC. ***This does not mean JWLAPUSDC*** ***is not 1:1 backed.*** JWLAPUSDC **is 1:1 backed**. Please read up on how [POL](/other-resources/definitions/jewelswap-protocol-owned-liquidity-pol) works, what it does, and how the backing is ensured. *** #### **Staking** Staking JWLAPUSDC on JewelSwap will give the user more JWLAPUSDC. Rewards are paid multiple times per day. **Currently, no Money Market exists for APUSDC - until one gets added, no rewards are generated for stakers yet.** *** **Rewards** Rewards for JWLAPUSDC staking stem from these sources: * The APUSDC deposited by users is deployed into Hatom or JewelSwap Money Markets (and collateral activation if possible) to generate yield. **Currently, no Money Market exists for APUSDC - until one gets added, no rewards are generated for stakers yet.** *** #### **Unstaking** Unstaking JWLAPUSDC can happen immediatelly. JWLAPUSDC can be unstaked without lockup. *** #### Swapping You can swap JWLAPUSDC at varying market rates on Ashswap. *** **Redemption** JWLAPUSDC is redeemable 1:1 for APUSDC . Redeeming JWLAPUSDC for APUSDC takes 10 [epochs ](/other-resources/definitions#epoch)(unbonding time).\ 10 epochs is usually 10 days on the MultiversX network. [See Epochs.](/other-resources/definitions#epoch) When unbonding, you receive an NFT from JewelSwap. **UJWLAPUSDC NFT**\ This is a so-called [**unstaking/unbonding NFT**](/other-resources/definitions#unstaking-unbonding-nfts)**.**\ You can use this NFT to send it to a different wallet, trade it on NFT Marketplaces or [take a loan against it](/multiversx/nft-loan-modules/nft-loans-explained).\ You need the NFT (which is essentially a receipt) to claim your assets after the unbonding time passed. The NFT proofs your ownership of the unbonding assets. # Unredeemable Derivatives # JWLASH #### **Minting** JWLASH is a derivative token that can be minted using ASH. JWLASH **can** make use of [POL ](/other-resources/definitions/jewelswap-protocol-owned-liquidity-pol)by minting 1.1 JWLASH per deposited ASH. ***This does not mean JWLASH is not 1:1 backed.*** JWLASH **is 1:1 backed**. Please read up on how [POL](/other-resources/definitions/jewelswap-protocol-owned-liquidity-pol) works, what it does, and how the backing is ensured. *** #### **Staking** Staking JWLASH on JewelSwap will give the user more JWLASH. Rewards are paid out based on a 7-day epoch.\ This means that rewards are being accumulated for 7 days, and after this 7-day-epoch, the rewards are paid out to the stakers, relative to their staked amount. *** **Other utility: Gauge** Most of the primary tokens used to mint [JWLEGLD ](/multiversx/staking-derivatives/introduction-to-staking/derivative-tokens/redeemable-derivatives/s-jwlegld)(in accordance with [POL](/)) are being delegated to various whitelisted validators to earn rewards. The [Gauge mechanism](/multiversx/staking-derivatives/gauge) decides which validator gets more EGLD delegated towards him. Staked JWLASH is eligible for voting on [Gauge ](/multiversx/staking-derivatives/gauge)governance. *** **Rewards** Rewards for JWLASH staking stem from these sources: * Modules where JewelSwap utilizes AshSwap (in particular the veASH), 15% of user-generated rewards are used to **buy** more JWLASH from the open market and given to stakers. * Unless the market ratio between JWLASH:ASH is (near) 1:1, then the user-generated rewards are used to mint more JWLASH instead. Whatever gives the highest rewards to stakers. Rewards can be bought from the open market to provide protocol-driven buy pressure to JWLASH. Also, the [POL protocol owned liquidity](/other-resources/definitions/jewelswap-protocol-owned-liquidity-pol) earns rewards in ASH, and the rewards can be used to **buy** (or mint) more JWLASH from the open market. The JWLASH is used to bribe AshSwap Farms or given to stakers. *** #### **Unstaking** Unstaking JWLASH from staking is possible after the initial lock up period has passed.\ When you first stake JWLASH, it is locked for 7 days. **After these 7 days have passed**, **you can** keep your JWLASH in staking or **remove it from staking at any time, instantly**. If you deposit more JWLASH or reinvest your rewards by depositing them again, the lock will reset. *** #### Swapping You can swap JWLASH at varying market rates on AshSwap. # JWLMEX #### **Minting** JWLMEX is a derivative token that can be minted using MEX. JWLMEX **can** make use of [POL](/other-resources/definitions/jewelswap-protocol-owned-liquidity-pol)[ ](/other-resources/definitions/jewelswap-protocol-owned-liquidity-pol)by minting 1.3 JWLMEX per deposited MEX. ***This does not mean JWLMEX is not 1:1 backed.*** JWLMEX **is 1:1 backed**. Please read up on how [POL](/other-resources/definitions/jewelswap-protocol-owned-liquidity-pol) works, what it does, and how the backing is ensured. *** #### **Staking** Staking JWLMEX on JewelSwap will give the user [JWLXMEX](/multiversx/staking-derivatives/introduction-to-staking/derivative-tokens/unredeemable-derivatives/jwlxmex). Rewards are paid out based on a 7-day epoch.\ This means that rewards are being accumulated for 7 days, and after this 7-day-epoch, the rewards are paid out to the stakers, relative to their staked amount. *** **Rewards** Rewards for JWLMEX staking stem from these sources: * Modules where JewelSwap utilizes xExchange, 15% of user-generated rewards are given to [JWLXMEX ](/multiversx/staking-derivatives/introduction-to-staking/derivative-tokens/unredeemable-derivatives/jwlxmex)stakers. * Because xExchange gives out only (locked) xMEX in rewards, JWLXMEX are minted, still backed by the newly earned xMEX, and given to the [JWLXMEX ](/multiversx/staking-derivatives/introduction-to-staking/derivative-tokens/unredeemable-derivatives/jwlxmex)stakers. The MEX used to mint JWLXMEX are **either** locked for xMEX, which is used to mint JWLXMEX **or** used to buy JWLXMEX. The JWLXMEX are then staked to generate rewards for JWLMEX stakers. {% hint style="warning" %} **Important:** JWLMEX is minted using MEX. MEX itself cannot be used by JewelSwap to generate rewards on xExchange or using the JewelSwap xExchange modules. Therefore, JewelSwap will buy JWLXMEX on AshSwap using the MEX (**only when the swap ratios are favorable**). The JWLXMEX are subsequently being staked to earn a share of the generated rewards. {% endhint %} *** #### **Unstaking** Unstaking JWLMEX from staking is possible after the initial lock up period has passed.\ When you first stake JWLMEX, it is locked for 7 days. **After these 7 days have passed**, **you can** keep your JWLMEX in staking or **remove it from staking at any time, instantly**. If you deposit more JWLMEX or reinvest your rewards by depositing them again, the lock will reset. *** #### Swapping You can swap JWLMEX at varying market rates on AshSwap. # JWLXMEX #### **Minting** JWLXMEX is a derivative token that can be minted using xMEX. (Minting is not live yet, pending whitelist from xExchange) *** #### **Staking** Staking JWLXMEX on JewelSwap will give the user SJWLXMEX, which is appreciating in value against JWLXMEX. SJWLXMEX can be transferred between wallets too. This allows you to transfer your ownership to another wallet, without having to unstake your SJWLXMEX. Rewards are paid out continuously. *** **Rewards** Rewards for JWLXMEX staking stem from these sources: * Modules where JewelSwap utilizes xExchange, 15% of user-generated rewards are given to JWLXMEX stakers. * Because xExchange gives out only (locked) xMEX in rewards, JWLXMEX are minted, still backed by the newly earned xMEX, and given to the JWLXMEX stakers. *** #### **Unstaking** Unstaking SJWLMEX from staking is possible at all times, instantly, at no fee. *** #### Swapping You can swap JWLXMEX at varying market rates on AshSwap. # JWLUTK #### **Minting** JWLUTK is a derivative token that can be minted using UTK. JWLUTK **can** make use of [POL](/other-resources/definitions/jewelswap-protocol-owned-liquidity-pol)[ ](/other-resources/definitions/jewelswap-protocol-owned-liquidity-pol)by minting 1.3 JWLUTK per deposited UTK. ***This does not mean JWLUTK is not 1:1 backed.*** JWLUTK **is 1:1 backed**. Please read up on how [POL](/other-resources/definitions/jewelswap-protocol-owned-liquidity-pol) works, what it does, and how the backing is ensured. *** #### **Staking** Staking JWLUTK on JewelSwap will give the user more JWLUTK. Rewards are paid out based on a 7-day epoch.\ This means that rewards are being accumulated for 7 days, and after this 7-day-epoch, the rewards are paid out to the stakers, relative to their staked amount. *** **Rewards** Rewards for JWLUTK staking stem from these sources: * UTK are being staked on xExchange to generate rewards. * Once the xMoney Guilds are live, the UTK will be withdrawn from xExchange Metastaking and used to create a guild. The guild's rewards will be shared with JWLUTK stakers accordingly. *** #### **Unstaking** Unstaking JWLUTK from staking is possible after the initial lock up period has passed.\ When you first stake JWLUTK, it is locked for 7 days. **After these 7 days have passed**, **you can** keep your JWLUTK in staking or **remove it from staking at any time, instantly**. If you deposit more JWLUTK or reinvest your rewards by depositing them again, the lock will reset. *** #### Swapping You can swap JWLUTK at varying market rates on Ashswap. # JWLITHEUM #### **Minting** JWLITHEUM is a derivative token that can be minted using ITHEUM. JWLITHEUM **can** make use of [POL](/other-resources/definitions/jewelswap-protocol-owned-liquidity-pol)[ ](/other-resources/definitions/jewelswap-protocol-owned-liquidity-pol)by minting 1.3 JWLITHEUM per deposited ITHEUM. ***This does not mean JWLITHEUM is not 1:1 backed.*** JWLITHEUM **is 1:1 backed**. Please read up on how [POL](/other-resources/definitions/jewelswap-protocol-owned-liquidity-pol) works, what it does, and how the backing is ensured. *** #### **Staking** Staking JWLITHEUM on JewelSwap will give the user more JWLITHEUM. Rewards are paid out based on a 7-day epoch.\ This means that rewards are being accumulated for 7 days, and after this 7-day-epoch, the rewards are paid out to the stakers, relative to their staked amount. *** **Rewards** Rewards for JWLITHEUM staking stem from these sources: * ITHEUM are being staked on xExchange to generate rewards. *** #### **Unstaking** Unstaking JWLITHEUM from staking is possible after the initial lock up period has passed.\ When you first stake JWLITHEUM , it is locked for 7 days. **After these 7 days have passed**, **you can** keep your JWLITHEUM in staking or **remove it from staking at any time, instantly**. If you deposit more JWLITHEUM or reinvest your rewards by depositing them again, the lock will reset. *** #### Swapping In the future, a JWLITHEUM-ITHEUM pool will be set up on AshSwap DEX. You will be able to swap JWLITHEUM on AshSwap at varying market rates. # JWLTADA #### **Minting** JWLTADA is a derivative token that can be minted using TADA. JWLTADA **can** make use of [POL](/other-resources/definitions/jewelswap-protocol-owned-liquidity-pol)[ ](/other-resources/definitions/jewelswap-protocol-owned-liquidity-pol)by minting up to 1.3 JWLTADA per deposited TADA. ***This does not mean JWLTADA is not 1:1 backed.*** JWLTADA **is 1:1 backed**. Please read up on how [POL](/other-resources/definitions/jewelswap-protocol-owned-liquidity-pol) works, what it does, and how the backing is ensured. *** #### **Staking** Staking JWLTADA on JewelSwap will give the user more JWLTADA . Rewards are paid out based on a 7-day epoch.\ This means that rewards are being accumulated for 7 days, and after this 7-day-epoch, the rewards are paid out to the stakers, relative to their staked amount. *** **Rewards** Rewards for JWLTADA staking stem from these sources: * TADA are being staked on xExchange to generate rewards. *** #### **Unstaking** Unstaking JWLTADA from staking is possible after the initial lock up period has passed.\ When you first stake JWLTADA, it is locked for 7 days. **After these 7 days have passed**, **you can** keep your JWLTADA in staking or **remove it from staking at any time, instantly**. If you deposit more JWLTADA or reinvest your rewards by depositing them again, the lock will reset. *** #### Swapping In the future, a JWLTADA-TADA pool will be set up on AshSwap DEX. You will be able to swap JWLTADA on AshSwap at varying market rates. # Gauge ### Overview The term "Gauge" refers to the governance voting process carried out by JWLASH stakers. These stakers have the privilege of casting their votes in favor of their preferred validator or staking provider. It's important to note that only validators who have been whitelisted are eligible to be subjected to these votes. {% hint style="info" %} If you are a validator, interested in becoming whitelisted for Gauge voting and receiving a part of the EGLD used to mint JWLEGLD, please contact us. {% endhint %} This system empowers JWLASH stakers to determine which validator should receive a larger share of the deposited EGLD, which is used to mint JWLEGLD through delegation. The voting percentages are regularly updated every epoch on Thursdays. * Voting percentages will be updated every epoch on Thursday. * Each gauge vote can only be voted on every 10 days. * The amount of EGLD being delegated to a validator is dependent on the percentage of votes that validator received. * When it comes to undelegated EGLD, it will be systematically undelegated in order, starting from the least voted validator and moving towards the most voted validator.
# Lending for Farms # Lending for Farms: Explained ## About For farmers to be able to enjoy leverage on their position, they need to be able to borrow assets from somewhere. JewelSwap has introduced specialized lending pools on it's lending page, which allows anyone to deposit assets into various lending pools. When depositing assets into the lending pool, the user receives a token, which represents their lending position.\ As described in the [tokenomics](/multiversx/lending-for-farms/ji-tokenomics) section, the user receives JI-Tokens (Jewel-Interest bearing Tokens). This representative token constantly grows in value compared to the deposited token. *** ## Withdrawing funds **A lender can take back their loaned assets whenever they want. This is possible only if there are tokens in the pool that no one has borrowed.** The utilization rate (displayed in percent) shows how much has been borrowed versus how much has been deposited into the lending pools. If the utilization is at 0%, nothing has been borrowed by farmers. If it is at 50%, half of all deposited tokens are being borrowed by farmers right now. At the least, lenders get 30% of the rewards generated by farmers practicing leveraged farming. This means that farmers can borrow perpetually. *Being able to withdraw from the lending pool is therefore dependent on the farmers closing their leveraged yield farms and returning the loan.* *** ## Pool Usage **The more the lending pool's resources are used, the greater the share of rewards lenders receive from farmers.** There comes a time when a farmer's leveraged farm yields the same Annual Percentage Rate (APR) as a non-leveraged farm due to high usage. In extreme cases, with utilization rates over 99%, a farmer earns no rewards or APR at all (zero rewards/zero APR). If farmers overuse a lending pool, their APR can fall to zero. This encourages them to end their leveraged farming, repay the borrowed funds, and farm without leverage. This in turn means funds become available again for lenders to withdraw. Meanwhile, lenders will receive a larger portion of the rewards, causing their APR to increase significantly. Indeed, if utilization is very high, farmers have no benefit from leveraged farming. They would earn less than or, in extreme cases, nothing compared to non-leveraged farming. This is a heavy incentive to close leveraged farm positions and pay back lenders. *** ## Fund usage safety Farmers do not use borrowed funds themselves. JewelSwap keeps the Liquidity Pool (LP) Token. The farmer never has direct access to the borrowed funds, therefore, he cannot steal borrowed funds. *** ## **Risk of Bad Debt** While JewelSwap's lending system is designed to minimize risks through stringent liquidation mechanisms and risk management measures, it is important to acknowledge the potential for lenders to encounter bad debt. Bad debt may occur in rare circumstances where borrowers (in this case, the farmers) fail to meet their repayment obligations, resulting in a loss for lenders. This can happen in extreme market conditions where assets rise or fall in value faster than the liquidation process can close the position, despite the decent liquidation buffer put in place by JewelSwap. JewelSwap is committed to maintaining the integrity of its lending pools and actively works to mitigate risks. However, users should be aware that, despite our best efforts, lending always carries some inherent risks. It is essential for lenders to stay informed about the state of the lending pools and to exercise caution when participating in the lending ecosystem. By doing so, you can make informed decisions and manage potential risks effectively. [**Start lending various tokens now** ](https://app.jewelswap.io/lend) # JI-Tokenomics JITokens (Jewel Interest Tokens) are issued to user when they deposit assets to the lending pools. JITokens are used to keep track of the funds user have deposited as well as any interest earned. ## Interest earned by JITokens * Each lending pool earns interest. The interest is earned by just holding JITokens. * The number of JITokens in your wallet remains the same while JITokens accumulate interest with their exchange rate. The JIToken value increase over time which becomes exchangeable for a larger amount of its underlying asset. * Example: * You deposit 1.1 EGLD and receive 1 JIEGLD. (Exchange rate: 1 JIEGLD = 1.1 EGLD) * When withdrawing your 1 JIEGLD a few weeks later, you will be able to withdraw more then the 1.1 EGLD you deposited (new exchange rate: 1 JIEGLD = 1.15 EGLD) * Each lending pool utilisation rate will reflect the extent of appreciation of the corresponding JITokens. * Due to accumulation of interest, the longer the user holds JITokens, the higher the value of the tokens. * The exchange rates are displayed on the Lend page under the individual JITokens. # JewelSwap Yield Farming # Introduction ## About There are [three different types](/multiversx/jewelswap-yield-farming/farm-overview) of yield farms of JewelSwap 1. [**Optimized Yield Farming**](/multiversx/jewelswap-yield-farming/farm-overview/optimized-yield-farming) - Refers to farms which offer free autocompounding. Rewards of that farm are being reinvested to create more LP (Liquidity Pool) tokens, which increases the APY of the user and maximizes capital efficiency. This leads to the highest possible returns on the investment. 2. [**Boosted Yield Farming**](/multiversx/jewelswap-yield-farming/farm-overview/boosted-yield-farming) - Certain protocols, such as AshSwap, offer two types of APR: base rewards, which are available to all users, and boosted rewards, which are available only if you lock/stake enough of the protocol's token. JewelSwap offers boosted rewards from these kinds of protocols to its users for free. 3. [**Leveraged Yield Farming**](/multiversx/jewelswap-yield-farming/farm-overview/leveraged-yield-farming) - By borrowing funds from lenders, farmers essentially created leverage, which means their APR is multiplied. By borrowing funds from lenders to create more LP tokens, more rewards can be farmed, which results in a higher APR. Often, you will find that JewelSwap combined all three properties for a farm, which results in the best yield farming experience possible. Optimized, Boosted and Leveraged Yield Farming all-in-one.
# Farm Overview This table shows, which farm category offers which type(s) of yield optimization.
NameOptimizedBoostedLeverage (optional)
AshSwap✅✅✅
OneDex✅❌❌
Hatom✅✅✅
JewelSwap✅✅✅ (some)
xExchange
(Energy DAO)		❌✅❌
# Optimized Yield Farming ## About Optimized Yield Farming refers to frequent autocompounding. In typical yield/liquidity farms, rewards become available for the user to claim. JewelSwap takes those rewards and reinvests it on the user's behalf.\ Reinvesting the farmed rewards for more LP tokens increases the APY the user receives. Rewards are being autocompounded for free multiple times a day for the maximum possible APY. # Boosted Yield Farming ## About To understand boosted yield farming, we first need to go over how protocols like AshSwap work. Protocols like AshSwap offer normal rewards that are available to all users and boosted rewards, which are only available if you lock enough of the protocol's own token. Meaning: investing into the protocol's token can get you higher rewards. JewelSwap offers boosted rewards to it's users for free. JewelSwap offers staking opportunities for users in the form of [JWLASH](/multiversx/staking-derivatives/introduction-to-staking/derivative-tokens/unredeemable-derivatives/jwlash), [JWLHTM ](/multiversx/staking-derivatives/introduction-to-staking/derivative-tokens/redeemable-derivatives/jwlhtm)and [JWLMEX ](/multiversx/staking-derivatives/introduction-to-staking/derivative-tokens/unredeemable-derivatives/jwlmex)(and possibly more in the future). Users who stake their protocol tokens receive shared revenue from the farmers.\ Farmers get to enjoy a higher (boosted) APR, and the stakers get to enjoy a part of the farmer's revenue. # Leveraged Yield Farming ## About Leveraged Yield Farming (LYF) allows you to borrow assets to multiply your yield farming positions and amplify, maximize your profits. Farmers/Borrowers borrow money from [lenders](broken://pages/pWRiVzdstTgIyJpZz9Ou) in order to have more assets in their farm, which in turn means higher rewards. # Farms # AshSwap Farms ## About AshSwap is an innovative DEX on MultiversX, offering AMM style Liquidity Pools and swap for users.\ They are known for their Governance mechanism, the stableswaps and the various farms users can enjoy. JewelSwap integrated various AshSwap Farms into it's Farm module, which allows users to efficiently and easily farm AshSwap farms. *** ## Features AshSwap Farms get to enjoy all 3 JewelSwap Farm Types: * [Optimized ](/multiversx/jewelswap-yield-farming/farm-overview/optimized-yield-farming)Yield Farming * [Boosted ](/multiversx/jewelswap-yield-farming/farm-overview/boosted-yield-farming)Yield Farming * [Leveraged ](/multiversx/jewelswap-yield-farming/farm-overview/leveraged-yield-farming)Yield Farming (optional) Farm rewards, which AshSwap pays out in ASH tokens, are autocompounded (-> reinvested) multiple times per day for maximum capital efficiency. This means JewelSwap uses the ASH your position has earned, to create more LP tokens (thus, growing your position). AshSwap offers boosted yields for users that own enough veASH (veASH = vote escrowed ASH, essentially vested/locked ASH). Because JewelSwap owns a lot of veASH (due to the [JWLASH ](/multiversx/staking-derivatives/introduction-to-staking/derivative-tokens/unredeemable-derivatives/jwlash)derivative) it can offer higher APYs to it's users. Be aware of slippage/swap fees when opening and closing positions. After all, the borrowed assets need to be swapped accordingly to create more LP Tokens. When opening or closing a position within a short timeframe, you will not have made any money, perhaps even lost a few dollars due to the swap fees. Leveraged Farms should be used for longer timeframes ideally.
*** ## Usage For a UI walkthrough of how to use the farms, check out [the tutorial](/multiversx/jewelswap-yield-farming/position-management). ### Fees For fee information, check out the [fee table](/multiversx/jewelswap-yield-farming/protocol-fees#ashswap-farms). # OneDex Farms ## About OneDex is a permissionless DEX on MultiversX, offering AMM style Liquidity Pools and swap for users. JewelSwap integrated various OneDex Farms into it's Farm module, which allows users to efficiently and easily farm OneDex farms. *** ## Features OneDex Farms get to enjoy the following Farm Types: * [Optimized ](/multiversx/jewelswap-yield-farming/farm-overview/optimized-yield-farming)Yield Farming Farm rewards, which OneDex pays out, are autocompounded (-> reinvested) multiple times per day for maximum capital efficiency. This means JewelSwap uses the rewards your position has earned, to create more LP tokens (thus, growing your position).
*** ## Usage For a UI walkthrough of how to use the farms, check out [the tutorial](/multiversx/jewelswap-yield-farming/position-management). ### Fees For fee information, check out the [fee table](/multiversx/jewelswap-yield-farming/protocol-fees#onedex-farms). # Hatom Farms ## About Hatom is Money Market/Lending-Borrowing platform on MultiversX, offering users the opportunity to earn rewards for their lent assets. JewelSwap integrated various Hatom into it's Farm module, which allows users to efficiently and easily farm their tokens on Hatom through JewelSwap. *** ## Features Hatom Farms get to enjoy the following Farm Types: * [**Optimized** ](/multiversx/jewelswap-yield-farming/farm-overview/optimized-yield-farming)Yield Farming * [**Boosted** ](/multiversx/jewelswap-yield-farming/farm-overview/boosted-yield-farming)Yield Farming Lending rewards, which Hatom pays out, are autocompounded (-> reinvested) multiple times per day for maximum capital efficiency. Furthermore, Hatom offers boosted rewards for users who own enough HTM tokens. JewelSwap owns some HTM through the [JWLHTM ](/multiversx/staking-derivatives/introduction-to-staking/derivative-tokens/redeemable-derivatives/jwlhtm)derivative, therefore it can offer higher APR to it's users. **Important:** For closing positions, JewelSwap makes use of a flash-mint mechanism by flash-minting JWLEGLD or JWLUSD for the respective farms, repaying the debt, get the position back, swap back to the minted tokens to flash-burn, and then return the balance equity to the user. This means that closing positions can incur small slippage losses. However, the alternative, which would be de-looping the position and paying the transaction fees for a multitude of actions would be more expensive.
*** ## Usage For a UI walkthrough of how to use the farms, check out [the tutorial](/multiversx/jewelswap-yield-farming/position-management). ### Fees For fee information, check out the [fee table](/multiversx/jewelswap-yield-farming/protocol-fees#hatom-farms). # JewelSwap Farms ## About JewelSwap Farms are special farms created by the JewelSwap team that embody more advanced DeFi strategies to it's users. *** ## Features JewelSwap Farms get to enjoy the following Farm Types: * [**Optimized** ](/multiversx/jewelswap-yield-farming/farm-overview/optimized-yield-farming)Yield Farming * [**Boosted** ](/multiversx/jewelswap-yield-farming/farm-overview/boosted-yield-farming)Yield Farming (some of them) * [**Leveraged** ](/multiversx/jewelswap-yield-farming/farm-overview/leveraged-yield-farming)Yield Farming (optional)
*** ## Available Farms The ***EGLD Single-Asset-Farm*** works like this: 1. User deposits 1 EGLD, which is used to mint 1 JWLEGLD and then staked for SJWLEGLD 2. 1 JWLEGLD is being flashminted, and sold for EGLD on AshSwap 3. That 1 EGLD is being used to mint 1 JWLEGLD and that is also staked for SJWLEGLD 4. Now, the user borrows 1 JWLEGLD from JewelSwap, against his 2 SJWLEGLD. 5. That 1 JWLEGLD is used to return the flashminted JWLEGLD. Liquidation can still happen if the open-market price of JWLEGLD were to rise against EGLD. The [safety buffer](/multiversx/jewelswap-yield-farming/liquidation) of your position has to fall to zero for a [liquidation ](/multiversx/jewelswap-yield-farming/liquidation)to occur. However this is unlikely due to arbitrage, but not impossible. When closing the position, the following happens: 1. Unstake all SJWLEGLD 2. Return 1 JWLEGLD, which you still owe JewelSwap 3. Swap the remaining amount to EGLD on AshSwap and the remaining EGLD are yours. Be aware of slippage/swap fees when opening and closing positions. After all, the borrowed assets need to be swapped accordingly to create more LP Tokens. When opening or closing a position within a short timeframe, you will not have made any money, perhaps even lost a few dollars due to the swap fees. Leveraged Farms should be used for longer timeframes ideally. *** The ***sEGLD, USDC and USDT Single-Asset-Farms*** utilize Hatom: 1. User deposits 1 sEGLD (or USDC), which is lent and activated as collateral at Hatom to earn USDC rewards 2. 1 JWLEGLD (or JWLUSD) is being flashminted, and swapped for sEGLD (or USDC) on Ashswap 3. Now, the user borrows 1 JWLEGLD (or JWLUSD) from JewelSwap, against his collateral of 2 sEGLD (or USDC). 4. That 1 JWLEGLD (or JWLUSD) is used to return the flashminted JWLEGLD (or JWLUSD) And now, closing the position… 1. Withdraw sEGLD (or USDC) from both, collateral and from lending 2. Buy 1 JWLEGLD (or JWLUSD) using sEGLD to pay back the debt 3. The rest sEGLD (or USDC) are returned to the user Be aware of slippage/swap fees when opening and closing positions. After all, the borrowed assets need to be swapped accordingly to create more LP Tokens. When opening or closing a position within a short timeframe, you will not have made any money, perhaps even lost a few dollars due to the swap fees. Leveraged Farms should be used for longer timeframes ideally. *** The ***other Farms*** listed at the moment are simply leveraged AshSwap Farms, with the difference being that the user does not borrow from lenders, instead, he borrows JWLEGLD or JWLUSD directly from the JewelSwap protocol. The borrowed JWLEGLD or JWLUSD is swapped to the needed asset to create more LP Tokens. Be aware of slippage/swap fees when opening and closing positions. After all, the borrowed assets need to be swapped accordingly to create more LP Tokens. When opening or closing a position within a short timeframe, you will not have made any money, perhaps even lost a few dollars due to the swap fees. Leveraged Farms should be used for longer timeframes ideally. *** ## Usage For a UI walkthrough of how to use the farms, check out [the tutorial](/multiversx/jewelswap-yield-farming/position-management). ### Fees For fee information, check out the [fee table](/multiversx/jewelswap-yield-farming/protocol-fees#jewelswap-farms). # xExchange Farms (Energy DAO) ## About xExchange is the DEX that launched on MultiversX, offering AMM style Liquidity Pools and swap for users. *** ## Features xExchange Farms get to enjoy the following JewelSwap Farm Types: * [Boosted ](/multiversx/jewelswap-yield-farming/farm-overview/boosted-yield-farming)Yield Farming (Optimized Farming and Leveraged Farming are not possible due to xExchange's design as of today) Farm rewards, which xExchange pays out in xMEX tokens, minted in the form of JWLXMEX and given to the user (claimable). xExchange offers boosted yields for users that own enough xMEX (xMEX = locked MEX). Because JewelSwap owns a lot of xMEX (due to the [JWLMEX ](/multiversx/staking-derivatives/introduction-to-staking/derivative-tokens/unredeemable-derivatives/jwlmex)and [JWLXMEX](/multiversx/staking-derivatives/introduction-to-staking/derivative-tokens/unredeemable-derivatives/jwlxmex) derivative) it can offer higher APYs to it's users.
*** ## Usage For a UI walkthrough of how to use the farms, check out [the tutorial](/multiversx/jewelswap-yield-farming/position-management). ### Fees For fee information, check out the [fee table](/multiversx/jewelswap-yield-farming/protocol-fees#ashswap-farms). # Position Management ## **Open Position** On JewelSwap, click on Farm, and select which Farm category you want to see.
Next, choose among the many farms and click on the "Farm" button.
The following window will open, which allows you to change a few details of your position. We will go over them one and explain what everything does.
* **1** - In this section you can deposit either only USDT, only ASH, only the LP Token or a mix of USDT and ASH. It's up to you. JewelSwap will take whatever you entered and balance it out to create more LP Tokens. If you deposit only USDT, the correct amount will be swapped to ASH, in order to create the LP Token. * Be aware of slippage and swap fees, if you provide only one token or an imbalanced amount of the two tokens. * **2** - Here you can ***optionally*** use leverage if you like. * If you use leverage, regularily check your position * You risk [liquidation](/multiversx/jewelswap-yield-farming/liquidation) in extreme market scenarios * APR might fluctuate - [if more people borrow money from lenders, APR will go down and can even become zero](/multiversx/lending-for-farms/lending-for-farms-explained#pool-usage) (you earn no rewards anymore). In this scenario, closing the position and opening a new one **without leverage** is the better idea. * **3** - In this sector you can choose which asset you like to borrow (if you enabled leverage). * If you borrow USDT for your USDT-ASH position, be aware that you are essentially longing ASH and shorting USDT. * You use the borrowed USDT to buy ASH (to create the LP Token). Therefore you are longing ASH. * If ASH were to fall in price, it will be harder and harder to repay the loan, eventually leading to [liquidation](/multiversx/jewelswap-yield-farming/liquidation). *** ## **My Positions** Go to "Portfolio" > "My Positions" to view the list of your opened positions. Switch between the DEX tabs to view the positions of the respective DEX. (Eg. ASHSWAP, ONEDEX).
Here you will see your opened Farm position, the current APY, the position value ([shown in just one token](/multiversx/jewelswap-yield-farming/liquidation#why-does-my-position-value-fluctuate) and also as the amount of LP tokens), the debt (if leverage is used, otherwise it is zero), and to the right the safety buffer and the leverage used. This allows you to monitor all of your positions in a glance. The safety buffer is irrelevant in the screenshot above, because no leverage was used to create this position. **A position with no leverage cannot get liquidated.** *** ## **Close Position** To close a position, simply click "Close" next to your position and adjust the slippage accordingly if need be.
*** ## Partial Position Closing
If you decide to enable the "Partially close your position?" checkbox, you can decide to only close 10, 20, 30 or any % of your position. This useful * for repaying debt to decrease your leverage and improve your safety buffer. * to take some funds out of your position if you need them elsewhere, without having to close the entire position. *** ## Adjust Position
By clicking on "Adjust" here, you will see the following popup window:
Clicking on "borrow more?" allows you to borrow more funds from lenders, which in turn means you will have a higher leverage. If you do not intend to borrow more, you can provide more assets yourself (more USDT, more ASH or more LP Tokens) to expand your position. You simply add more assets to your existing position. # Liquidation ## When does Liquidation happen **Liquidation happens when the Safety Buffer shown for your position falls to 0.** * **Debt Value** is how many tokens you borrowed from lenders * **Position Value** is the total value of the farmed position (i.e. the value of your LP tokens, including your provided assets and the assets you borrowed) * **Debt Ratio** is the Debt Value divided by the Position Value -> $$DR = DV/PV$$ *** ## The maths behind the Safety Buffer | | Formula | Value | Desc. | | --------------------------- | ------------------------------------------------------ | ----- | ----------------------------------------------------------------------------------- | | Deposit value in $ | | 100 | You, the user, starts the farm with 100$ worth of assets | | Leverage | | 3 | 3x leverage | | Borrowed amount (debt) in $ | Deposit \* (Leverage - 1) | 200 | To create 3x leverage, 2x the amount you deposited has to be borrowed | | Position size in $ | Deposit \* Leverage | 300 | Total position size after leverage is applied | | Liquidation threshold | | 90% | (Explanation below) | | Safety Buffer | Leverage / Position size - (1 - Liquidation threshold) | 23% | Tells you how much (in %) your position can lose in value before you get liquidated | The liquidation threshold in the context of JewelSwap is a dynamic metric rather than a fixed percentage; it is adjusted per farm based on an assessment of each farm's unique risk profile and market volatility. While the threshold itself may vary, **it is not an indicator that typical users should monitor**. For normal users, the more important figure is the 'Safety Buffer'. The safety buffer is the actual value indicating when a position gets liquidated. In the above scenario, the position would have to fall by 23% in value for it to get liquidated. To clarify, the liquidation threshold is instrumental in determining the Safety Buffer—it is a behind-the-scenes calculation that informs JewelSwap when to preemptively close a position to ensure it is managed effectively, especially in unpredictable markets. This preemptive measure is designed to safeguard the position from reaching a state where it is "underwater," meaning the market value has fallen below the debt value, which could result in a more severe financial loss. *** ## Why does my Position Value fluctuate? All position values are calculated and displayed in one token.\ Therefore, you might see your position value go down on some days - this is normal.\ Here is an example:
Why does my position value fluctuate instead of going only up? Example: JWLEGLD-EGLD Assume: Position value on JewelSwap is displayed in EGLD Position value is the same or even went down in the last days (displayed in JWLEGLD) Why, since you earn rewards? Explanation: JewelSwap displays the market value of your position, displayed as (as we wrote in the assumption) EGLD. So you have a JWLEGLD-EGLD position. But JewelSwap simplifies the display into just displaying the worth of your position in EGLD. So it will ask Ashswap "hey, how much is my JWLEGLD worth in EGLD?" through the SDK. If JWLEGLD lost value to EGLD (due to people selling JWLEGLD to EGLD) then your position value will stay the same, or even fall, **despite the rewards you get every day.** But, if you were to withdraw your Farm and count the JWLEGLD + EGLD together that you now have, you would see your actual position value. And while you get rewards every day, they cannot compensate market volatility, so your displayed Farm value may go down or stay the same at times, other times, it may even go up faster than it should. However, after a prolonged time period, you will see that you indeed received on average the APR that was displayed. — Same applies for all other Farms. If EGLD loses value against USDC, and your position value is displayed in USDC, the amount of USDC your position is worth will logically go down. That's how [AMMs ](/other-resources/definitions#automated-market-maker-amm)and [Impermanent Loss](/other-resources/definitions#impermanent-loss) work. Price impact always means, that the Trader gets less out than he put in (even on stableswap exchanges) and the liquidity provider suddenly holds more of token A than token B, in fact, he gained more of Token A than he lost of Token B. **JewelSwap now additionally displays the amount of LP tokens your position is worth. This allows you to see the continuous growth of your investment, based on the autocompounded rewards, but of course ignores any Impermanent Loss.**
*** ## Avoiding Liquidation In the case of a liquidation, the position would be closed, and the debt repaid. When the tokens you are holding drop in value significantly, then you need to careful about potential liquidation. * **Monitor your Safety Buffer.** It tells you how close you are to potential liquidation. Once it reaches zero, you will be liquidated. * **Farm less volatile assets**. If you are farming stablecoins, liquidation is extremely unlikely. Farming less volatile high marketcap assets is also safer than farming altcoins. But usually, higher risk assets will have higher APYs. # Protocol Fees ### **AshSwap Farms** This table illustrates which party earns how much of the generated rewards of the farmer.
TypeFarmersLendersJWLASH StakersProtocol
With leverageUp to 40%Minimum 30%15%15%
Without leverage70%N/A15%15%
*** ### **OneDex Farms** Up to 90% of the farming position yield farming rewards go to the Farmer. \ (ONE-EGLD - 85%)\ (LEGLD-EGLD - 90%)\ (USDC-USDT - 90%) *** ### **Hatom Farms** Up to 70% of Hatom farming position rewards go to the Farmers, 15% to the HTM stakers and balance to the Protocol. | Type | Farmers | JWLHTM Stakers | Protocol | | ---------------- | ------- | -------------- | -------- | | Without leverage | 70% | 15% | 15% | *** ### **JewelSwap Farms** Up to 70% of JewelSwap farming position rewards go to the farmers, balance to the Protocol. | Type | Farmers | Protocol | | ---------------- | ------- | -------- | | Without leverage | 70% | 30% | | With leverage | 70% | 30% | *** ### xExchange Farms (Energy DAO) Up to 70% of xExchange farming position rewards go to the farmers, balance to the Protocol. | Type | Farmers | Protocol | JWLXMEX stakers | | ---- | ------- | -------- | --------------- | | Farm | 70% | 15% | 15% | # Flexiloans # Flexiloans Introduction JewelSwap Flexiloans allow for treasuries to diversify to productive income-generating assets, and allow projects to keep building. Most project treasuries held their value in the native token eg. [$EGLD](https://twitter.com/search?q=%24EGLD\&src=cashtag_click), is not invested and is subject to potentially diminished value in bear markets. Providing liquidity pools for their Project tokens (Eg. [$XXX](https://twitter.com/search?q=%24XXX\&src=cashtag_click)) in EGLD-XXX are also risky with little income generation. Whitelisted projects can now borrow JWLEGLD against their EGLD (via Staked JWLEGLD) and by providing their equivalent project tokens, and start benefiting from a new revenue stream. Liquidity Pool/Farm will be setup with [$XXX](https://twitter.com/search?q=%24XXX\&src=cashtag_click)-JWLEGLD with [@ash\_swap](https://twitter.com/ash_swap) or [@OneFinityChain](https://twitter.com/OneFinityChain) (tba). Loan-to-value for the JWLEGLD will continue to decrease as the collateral SJWLEGLD continues to increase in value as an interest-bearing token. Projects can now earn with SJWELGD, an interest-bearing token which benefits from JewelSwap delegation staking to their validators. # Money Markets # JewelSwap Money Markets: An Introduction Welcome to the innovative world of JewelSwap Money Markets. Our Money Markets are designed to cater to a wide array of financial strategies, enabling users to maximize their capital efficiency while managing risk effectively. *** **Dual Market System:** JewelSwap distinctively offers two types of Money Markets: 1. **Isolated Money Markets:** Tailored for users who prefer managing risks associated with specific asset pairs individually. This system ensures that the risks inherent to one asset do not impact others, making it ideal for cautious investors. 2. **Global (Cross) Money Markets:** Designed for users looking to leverage their entire portfolio across multiple opportunities. This approach enhances capital efficiency but requires a comprehensive risk management strategy to mitigate systemic risks. **Oracle:** JewelSwap utilise the following Oracle Providers as well as price/safe price feeds from Ashswap and xExchange. 1. **Pyth Network** - a leading blockchain-based oracle solution that helps provide real-world data to smart contracts. 2. **Umbrella Network** - a decentralized, community owned oracle service that provides blockchain projects with secure, scalable, and customizable data solutions. *** **Choosing Your Path:** * **For Precision Risk Management:** Isolated Money Markets are your go-to, providing a secure environment for asset management. * **For Enhanced Capital Efficiency:** Global Money Markets offer the opportunity to maximize the utility of your collateral across diverse borrowing options. JewelSwap's Money Markets are at the forefront of DeFi innovation, offering seamless integration of isolated and global markets to cater to your financial strategy. Whether you're looking to lend, borrow, or optimize your portfolio, JewelSwap provides the tools and flexibility needed to navigate the DeFi landscape confidently. Dive into JewelSwap's Money Markets and unlock the potential of your digital assets today. # JewelSwap Points # JewelSwap Points: Introduction ## About JewelSwap Points is a new program offered by JewelSwap, in which users are able to earn points by simply using the protocol. As of today, there is no immediate usecase for the points, however this might change in the future. *** ## How to earn points There are a many different ways you can start earning points. You are able to earn points by * Staking * Farming * Voting * Lending * Borrowing * Referring new users *** **Staking, Farming, Lending** and **Borrowing** each earn you 1 point per 1$ staked/farmed/... The live market price of the asset is used for points calculation. Once a day, a snapshot is made where the dollar value is calculated and the points are added to your account. *** **Voting** - By voting for JewelSwap Farms on AshSwap (using your own veASH), you will earn points. Per 50 veASH voted for a Jewel-Farm, you will earn 1 point. The points for Farm weight voting only updates once per week, on every thursday. Do not worry if your points are not visible immediately. *** By **referring new users**, you will receive 10% of what the referred user has earned. If the newly referred user has earned 100 points, 10 points will be added to your account. Referrals only work for new users that have not used JewelSwap before and have not started earning points yet. # Derivative Tokens ### Overview Derivatives are a common concept in traditional finance (TradFi) and decentralized finance (DeFi). A derivative token creates a secondary market for an asset, that would otherwise not exist. JewelSwap is using derivatives to bring new possibilities to SUI, such as revenue sharing from different modules, access to new markets and new investment opportunities. *** ### Basic Mechanism: Generic Explanation 1. **Initial Deposit - Minting** * **Primary Token**: Users deposit a primary token (e.g., CETUS). The primary token is being staked/locked or sent to a protocol to earn rewards. * In return, they receive a **derivative token** (e.g., JWLCETUS) on a 1:1 ratio with the deposited primary asset. 2. **Earning Rewards - Staking** * To earn staking rewards, users then stake their derivative tokens on JewelSwap. * **Any derivative tokens not being staked thus increase the rewards for those who do stake their derivative tokens.** * For some tokens, users will receive a liquid-staked token that represents their staking position (e.g. **S**JWLSUI). This token grows in value relative to JWLSUI. 3. **APR Calculation - Rewards** * The **APR** for staking is dynamic and **depends on the underlying revenue source and possibly also of the underlying JewelSwap module.** * If less revenue is generated by the staked/locked "primary tokens", subsequently the APR for stakers will be lower as well. * If less revenue is generated by the JewelSwap module utilizing the derivative token, less rewards for stakers are generated as well. * **For more information how the revenue is generated for a specific derivative, check the derivative's docs page.** * The fewer derivative tokens are being staked, the higher the APR. * Not all primary tokens are used for revenue generation. Some are used for liquidity provision. To learn more about this, check out the individual docs page for the JWL-token you are interested in and the [POL](/other-resources/definitions/jewelswap-protocol-owned-liquidity-pol) [mechanism](/other-resources/definitions/jewelswap-protocol-owned-liquidity-pol). 4. **Unstaking** * Unstaking the derivatives from JewelSwap can happen anytime after the initial wait time has passed. * Example: You deposit JWLCETUS into staking on JewelSwap. You may not unstake the JWLCETUS for the next 7 days. After these 7 days have passed, you can keep them in staking or unstake them at **any time**. * Each derivative has a different unstaking mechanism. Some take 7 days to unstake, some have a lock period, some have a 10 day unstaking time - to find out for the specific derivative you are interested in, check it's specific docs page. 5. **Redemption** * Not all derivative tokens can be redeemed for their backing. Check the docs page of the specific derivative you are interested in. * The derivative tokens are sorted by "redeemable" and "non redeemable" in the menu. Please make sure to read the derivatives docs page and check the availability of redeemability. * To redeem a token, it must not be staked. A staked token cannot be redeemed. So to redeem a token, you first have to unstake it. * The unbonding period varies between the redeemable derivatives. Please check the unbonding duration of the derivative you are interested in, in it's docs page. # Redeemable Derivatives # JWLSUI Liquid Staking #### **Introduction** JewelSwap introduces innovative Dual-Token Liquid Staking, allowing everyone to benefit from the higher APY than traditional staking providers due to the **two-way** mechanism of staking: **minting** and **staking.** Fundamentally not all users, who converted **SUI into JWLSUI** will stake it (to receive rewards) but rather will participate in liquidity creation in the **JWLSUI-SUI pool on Cetus.** #### **Minting** JWLSUI is a derivative token that can be minted using SUI. JWLSUI **can** make use of [POL](/other-resources/definitions/jewelswap-protocol-owned-liquidity-pol) by minting 1.1 JWLSUI per deposited SUI. ***This does not mean JWLSUI is not 1:1 backed.*** JWLSUI ***is 1:1 backed***. Please read up on how [POL](/other-resources/definitions/jewelswap-protocol-owned-liquidity-pol) works, what it does, and how the backing is ensured.
*** #### **Staking** Staking JWLSUI will give the user SJWLSUI, which appreciates in value against JWLSUI. The SUI used to mint JWLSUI are staked across multiple validators on Sui. The staked SUI generates rewards during the day. The rewards are paid out, when staking providers distribute yield. Therefore, the ratio between SJWLSUI and JWLSUI rises once a day, as it is triggered daily. SJWLSUI can be transferred between wallets too. This allows you to transfer your ownership to another wallet, without having to unstake your SJWLSUI. *** [**Gauge** ](/sui/gauge)**mechanism** The Gauge mechanism decides which validator gets more SUI delegated towards him. Staked JWLSUI is eligible for voting on [Gauge ](/sui/gauge)governance. *** #### **Rewards** Rewards for JWLSUI staking stem from these sources: * SUI used to mint JWLSUI is staked at various staking providers on Sui to generate yield. *** #### **Unstaking** Unstaking SJWLSUI for JWLSUI is possible **instantly** and at no fees. *** #### Swapping You will be able to swap JWLSUI at varying market rates on Cetus. *** #### **Redemption/Unbonding - Unbonding NFT - Redemption Fees** JWLSUI is redeemable in a 1:1 ratio for normal SUI.\ The unbonding period for JWLSUI is 10 days. When unbonding, you receive an NFT from JewelSwap - **SUI claim NFT**\ This is a so-called [**unstaking/unbonding NFT**](/other-resources/definitions#unstaking-unbonding-nfts)**.** You can use this NFT to send it to a different wallet.\ You need the unstaking NFT to claim your SUI after those 10 days. The NFT proofs your ownership of the unbonding JWLSUI. **Most of the time, there are no fees associated with redeeming JWLSUI.**\ A dynamic fee mechanism may decide to start charging a small fee when redeeming JWLSUI.\ This mechanism adds a redemption fee **in case of high redemption requests**. This system is not yet in place and will be added in case further DeFi integrations for JWLXRD are implemented in the future. # Unredeemable Derivatives # JWLCETUS JWLCETUS is a derivative token that can be minted using CETUS 1:1. *** #### **Staking** Staking JWLCETUS on JewelSwap will give the user more JWLCETUS. Rewards are paid out based on a 7-day epoch.\ This means that rewards are being accumulated for 7 days, and after this 7-day-epoch, the rewards are paid out to the stakers, relative to their staked amount. *** **Rewards** Rewards for JWLCETUS staking stem from these sources: * xCETUS staking where JewelSwap will convert the CETUS received to xCETUS to earn a share of the governance staking rewards, which are swapped to JWLCETUS. * CETUS Yield Farming Modules (In progress) where JewelSwap utilizes CETUS for boosted farms and distributes a percentage of the yield farming rewards to the JWLCETUS stakers. Rewards can be bought from the open market by swapping to provide protocol-driven buy pressure to JWLCETUS. *** #### **Unstaking** Unstaking JWLCETUS from staking is possible after the initial lock up period has passed.\ When you first stake JWLCETUS, it is locked for 7 days. **After these 7 days have passed**, **you can** keep your JWLCETUS in staking or **remove it from staking at any time, instantly**. If you deposit more JWLCETUS or reinvest your rewards by depositing them again, the lock will reset. *** #### Swapping You can swap JWLCETUS at varying market rates on CETUS. *** #### POL (Protocol-owned Liquidity) JWLCETUS **can** mint 1.3 JWLCETUS per deposited CETUS with the additional JWLCETUS used for POL. ***This does not mean JWLCETUS is not 1:1 backed.*** JWLCETUS **is 1:1 backed**. Please read up on how [POL](/other-resources/definitions/jewelswap-protocol-owned-liquidity-pol) works, what it does, and how the backing is ensured. *** # JWLSCA JWLSCA is a derivative token that can be minted using CETUS 1:1. *** #### **Staking** Staking JWLSCA on JewelSwap will give the user more JWLSCA. Rewards are paid out based on a 7-day epoch.\ This means that rewards are being accumulated for 7 days, and after this 7-day-epoch, the rewards are paid out to the stakers, relative to their staked amount. *** **Rewards** Rewards for JWLSCA staking stem from these sources: * SCA staking where JewelSwap will convert the SCA received to veSCA to earn a share of the governance staking rewards, which are swapped to JWLSCA. * SCA Yield Farming Modules (In progress) where JewelSwap utilizes SCA for boosted farms and distributes a percentage of the yield farming rewards to the JWLSCA stakers. Rewards can be bought from the open market by swapping to provide protocol-driven buy pressure to JWLSCA. *** #### **Unstaking** Unstaking JWLSCA from staking is possible after the initial lock up period has passed.\ When you first stake JWLSCA, it is locked for 7 days. **After these 7 days have passed**, **you can** keep your JWLSCA in staking or **remove it from staking at any time, instantly**. If you deposit more JWLSCA or reinvest your rewards by depositing them again, the lock will reset. *** #### Swapping You can swap JWLSCA at varying market rates on SCA. *** #### POL (Protocol-owned Liquidity) JWLSCA **can** mint 1.3 JWLSCA per deposited CETUS with the additional JWLSCA used for POL. ***This does not mean JWLSCA is not 1:1 backed.*** JWLSCA **is 1:1 backed**. Please read up on how [POL](/other-resources/definitions/jewelswap-protocol-owned-liquidity-pol) works, what it does, and how the backing is ensured. *** # Gauge ## Overview The term "Gauge" refers to the governance voting process carried out by JWLSUI stakers. These stakers have the privilege of casting their votes in favor of their preferred validator or staking provider. It's important to note that only validators who have been whitelisted are eligible to be subjected to these votes. {% hint style="info" %} If you are a validator, interested in becoming whitelisted for Gauge voting and receiving a part of the SUI used to mint JWLSUI, please contact us. {% endhint %} This system empowers JWLSUI stakers to determine which validator should receive a larger share of the deposited SUI, which is used to mint JWLSUI through delegation. The voting percentages are regularly updated every epoch on Thursdays. * Voting percentages will be updated every epoch on Thursday. * Each gauge vote can only be voted on every 10 days. * The amount of SUI being delegated to a validator is dependent on the percentage of votes that validator received. * When it comes to undelegated SUI, it will be systematically undelegated in order, starting from the least voted validator and moving towards the most voted validator.
# Cetus Yield Farming ### Overview This document describes the architecture and workflow of the **Auto-Compounding Protocol integrated with Cetus Protocol**. The protocol automatically harvests rewards, converts them into liquidity, and compounds returns for users while charging a protocol performance fee. ### Cetus Protocol Integration Cetus Protocol is a concentrated liquidity DEX. Liquidity providers deposit tokens into pools and earn trading fees and incentive rewards. Reference pools: ### Protocol Workflow #### 1. User Deposit Users deposit **farm tokens** (LP tokens or single assets depending on strategy) into the protocol smart contract. **Process:** * User approves token spending * User calls `deposit()` function * Tokens are locked in the vault contract * User receives vault shares representing their ownership #### 2. Reward Harvesting and LP Reinvestment The protocol periodically (***every 30 minutes***) harvests rewards from Cetus farms. **Harvest flow:** 1. Claim farming rewards from Cetus 2. Swap reward tokens into the underlying LP token pair 3. Add liquidity back into Cetus pools 4. Mint additional LP tokens This increases the vault’s total assets and compounds user returns. #### 3. Boosted Rewards via xCetus The protocol stakes CETUS tokens into **xCetus** to obtain boosted yield multipliers (when applicable). **Benefits:** * Higher farming APY * Increased reward allocation * Additional governance benefits (if applicable) Boosted rewards are also harvested and reinvested automatically. #### 4. Auto-Compounding Engine The protocol runs an automated compounding strategy: * Harvest rewards at scheduled intervals * Convert rewards into LP tokens * Reinvest into Cetus pools * Update vault share price Users do not need to manually claim or reinvest rewards.

Farms page with APY

Single wUSDC-SUI farm

### Protocol Fees #### Performance Fee * **15% performance fee** is charged on harvested rewards * Fee is taken **before compounding** * Remaining rewards are fully reinvested **Fee allocation example:** * 100 CETUS rewards harvested * 15 CETUS sent to protocol treasury * 85 CETUS compounded for users ### User Benefits * Fully automated compounding * No manual harvesting required * Boosted yield through xCetus staking * Transparent fee model * Vault share-based accounting ### Risk Disclosure Users should be aware of the following risks: * Impermanent loss from LP positions * Cetus protocol dependency risk * Token price volatility * Oracle and swap slippage risk # Turbos Yield Farming ### Overview Our protocol integrates with **Turbos Finance Pools** to provide **1× leverage auto-compounding yield farming**. Users can deposit farm tokens, and the protocol automatically harvests and compounds rewards into LP tokens to maximize APY. ### How It Works #### 1. User Deposit Users can deposit **farm token** into the protocol vault. * The protocol handles LP provisioning automatically. * No manual LP management is required by the user. #### 2. Reward Harvesting & Compounding The protocol periodically: 1. Harvests farming rewards from Turbos Finance. 2. Swaps rewards into the required LP token components. 3. Re-adds liquidity to Turbos pools. This process continuously **compounds yields automatically**. #### 3. Protocol Fees * A **15% performance fee** is charged on harvested rewards. * Fees are taken **before compounding**. * The remaining 85% is fully reinvested for users. ### Leverage Policy * **Leverage: 1× only (no borrowing, no liquidation risk)** * Users are exposed only to standard AMM risks (impermanent loss, smart contract risk, protocol risk). ### Key Benefits * Fully automated compounding * No manual reward claiming * Gas-efficient harvesting * Simple single-token deposit UX * Reduced user complexity for LP management # Scallop Yield Farming Jewel Scallop Yield Farm is a pioneering leveraged yield farming protocol built on the Sui blockchain that integrates with the Scallop lending protocol. ### What is Jewel Scallop Yield Farm? Jewel Scallop Yield Farm is a pioneering **leveraged yield farming protocol** built on the Sui blockchain that integrates with the Scallop lending protocol to provide users with sophisticated DeFi farming opportunities. It's the first protocol to combine leveraged yield farming with VeSCA token boosting on the Sui ecosystem. #### Key Innovation: Deposit + Borrow + Lend Strategy Backed By VeSCA Boosting Jewel Scallop Yield Farm implements a unique **four-step yield farming mechanism**: 1. **Deposit**: Users deposit collateral tokens (e.g., SUI USDT) 2. **Borrow**: The protocol automatically borrows debt tokens (e.g., USDC) against the collateral 3. **Lend**: Borrowed tokens are supplied to lending markets to earn yield 4. **Boost**: VeSCA token staking provides up to 4x multiplier on incentive rewards This creates a **leveraged yield amplification** effect where users can earn significantly higher returns than traditional farming methods. ### How It Works #### The Farming Cycle ``` User Deposits Collateral (i.e, USDT) ↓ Protocol Calculates Borrow Capacity ↓ Protocol Borrows Debt (i.e, USDC) ↓ Protocol Supplies Debt to Lending Market (i.e, USDC) ↓ Protocol Earns Lending Yield + Borrow Incentives ↓ User Receives Position NFT + Yield Rewards ``` #### Leverage Mechanics * **Collateral Weight**: Typically 65% (borrow 65% of deposited value) * **Effective Leverage**: 2.86x (1 / (1 - 0.65)) * **Safety Margin**: 35% buffer against liquidation * **Risk Management**: Built-in liquidation protection through Scallop's obligation system ### Key Features #### 🚀 Leveraged Yield Farming * **Higher Returns**: Earn significantly more than traditional farming * **Capital Efficiency**: Maximize yield on your deposited assets * **Automated Strategy**: Protocol handles the complex borrowing and lending logic #### 🎯 VeSCA Integration * **Boosted Rewards**: Up to 4x multiplier on incentive rewards * **VeSCA Staking**: Lock VeSCA tokens for enhanced yields * **Dynamic Boosting**: Rewards scale with your VeSCA holdings #### 🔄 Automated Compounding * **Reward Harvesting**: Automatic collection of earned rewards * **Reinvestment**: Automatic reinvestment of rewards for compound growth * **Gas Optimization**: Efficient transaction batching #### 🛡️ Risk Management * **Liquidation Protection**: Built-in safeguards against liquidation * **Oracle Integration**: Real-time price feeds for accurate valuations * **Position Tracking**: NFT-based position ownership and management #### 💰 Multi-Layer Yield Generation * **Lending Yield**: Interest from supplying tokens to lending markets * **Borrow Incentives**: Rewards for participating in Scallop's incentive program * **VeSCA Boosting**: Enhanced rewards through VeSCA token staking * **Protocol Fees**: Share of fees collected from other users ### Yield Sources #### 1. Base Lending Yield * **Supply APR**: Earn interest by supplying tokens to lending markets * **Market Rates**: Dynamic rates based on supply and demand * **Compound Interest**: Automatic reinvestment for exponential growth #### 2. Borrow Incentive Rewards * **SUI Rewards**: Earn SUI tokens for borrowing activities * **SCA Rewards**: Earn SUI tokens for borrowing activities * **VeSCA Boosting**: Up to 4x multiplier on incentive rewards #### 3. Protocol Fee Sharing * **User Distribution**: 70% of yield distributed to position holders * **VeSCA Stakers' Fee Collection**: 15% of total yield distributed to VeSCA stakers as their commission * **Fee Collection**: 15% of total yield collected as protocol fees ### APR Calculation #### Total APR Formula ``` Total APR = (Supply APR - Borrow APR) × Leverage + (Base Incentive APR × VeSCA Boost Multiplier) ``` #### Example Calculation * **Supply APR**: 9.38% * **Borrow APR**: 13.43% * **Net Supply Yield**: -4.05% * **Leverage**: 2.86x * **Base Incentive APR**: 10% * **VeSCA Multiplier**: 4x (with sufficient VeSCA) **Total APR**: (-4.05% × 2.86) + (10% × 4x) = -11.58% + 40% = **28.42%** ### Integration with Scallop #### Scallop Protocol Integration * **Obligation System**: Leverages Scallop's collateral and debt management * **Lending Markets**: Uses Scallop's lending infrastructure * **Borrow Incentives**: Participates in Scallop's incentive programs * **Oracle System**: Integrates with Scallop's price feed system #### VeSCA Protocol Integration * **Subscription System**: Enables boosted rewards through VeSCA staking * **Reward Distribution**: Enhanced yield distribution to subscribers * **Governance**: Community-driven protocol management ### Community & Support #### Getting Help * **Documentation**: Comprehensive guides and tutorials * **Discord Community**: Real-time support and discussions * **GitHub Issues**: Technical support and bug reports * **FAQ Section**: Answers to common questions #### Contributing * **Community Governance**: Participate in protocol decisions * **Bug Reports**: Help improve the protocol security * **Feature Requests**: Suggest new features and improvements *** **Jewel Scallop Yield Farm** represents the next generation of DeFi farming, combining the power of leveraged yield farming with the innovative VeSCA boosting system on the Sui blockchain. Whether you're a DeFi veteran or new to yield farming, Jewel Scallop **Yield** Farm provides the tools and opportunities to maximize your returns in the Sui ecosystem. *Ready to start farming? Check out our How to Start Farming guide!* # How to Start Farming ### Prerequisites Before you begin farming with Jewel Scallop Yield Farm, ensure you have: #### 1. Sui Wallet * **Sui Wallet**: [Download Slush Wallet](https://chrome.google.com/webstore/detail/sui-wallet/opcgpfmipidbgpenhmajoajpbobppdil) * **Suiet**: [Download Suiet](https://chrome.google.com/webstore/detail/suiet-sui-wallet/khpkpbbcccdmmclmpigdgddabeilkdpd) * **Other Compatible Wallets**: Any wallet that supports Sui network #### 2. SUI Coins * **For Transaction Fees**: You'll need SUI coins to pay for gas fees * **Minimum Amount**: At least 1 SUI coin for initial transactions * **Where to Get**: Purchase from exchanges #### 3. Collateral Coins Choose one of the supported collateral coins: * **SUI USDT**: Most popular option * **SUI USDC**: Alternative stablecoin option * **SUI**: Native Sui coin * **Other coins** ### Step-by-Step Guide #### Step 1: Connect Your Wallet 1. **Visit the Platform**: Go to the Jewel Scallop Farm website 2. **Click "Connect Wallet"**: Look for the wallet connection button 3. **Select Your Wallet**: Choose from the supported wallet options 4. **Authorize Connection**: Approve the connection in your wallet 5. **Verify Connection**: Ensure your wallet address is displayed #### Step 2: Choose Your Farming Pair Select the assets you want to farm with: **Popular Farming Pairs** * **SUI USDT → USDC**: Most liquid and stable * **SUI USDC → USDT**: Alternative stablecoin pair **Considerations** * **Liquidity**: Higher liquidity pairs have better rates * **Volatility**: Stablecoin pairs have lower risk * **Rewards**: Different pairs may have different incentive rates #### Step 3: Deposit Collateral 1. **Select Amount**: Enter the amount you want to deposit 2. **Review Details**: Check the collateral value and borrow capacity 3. **Approve Transaction**: Approve the deposit transaction in your wallet 4. **Wait for Confirmation**: Wait for the transaction to be confirmed **Deposit Amount Guidelines** * **Minimum**: $10 for meaningful returns * **Recommended**: $1,000+ for better fee efficiency * **Maximum**: No hard limit, but consider risk management #### Step 4: Configure Borrowing (Optional) The protocol will automatically: 1. **Calculate Borrow Capacity**: Based on your collateral and collateral weight 2. **Borrow Debt Tokens**: Up to the maximum allowed amount 3. **Supply to Lending Market**: Earn lending yield on borrowed tokens #### Step 5: Stake VeSCA for Boosted Rewards (Optional) 1. **Navigate to VeSCA Section**: Find the VeSCA staking interface 2. **Select Amount**: Choose how much VeSCA to stake 3. **Choose Lock Period**: Longer locks provide higher multipliers 4. **Approve Transaction**: Confirm the staking transaction #### Step 6: Monitor Your Position Once your position is active, you can: **View Position Details** * **Total Value**: Current value of your position * **Deposited Amount**: Amount of collateral deposited * **Borrowed Amount**: Amount of debt borrowed * **Current APR**: Real-time APR calculation * **VeSCA Boost**: Current boost multiplier **Track Performance** * **Daily Rewards**: Rewards earned per day * **Total Rewards**: Cumulative rewards earned * **Position Health**: Risk metrics and health factor * **Market Conditions**: Current market utilization and rates ### Understanding Your Position #### Position Components **1. Collateral** * **Amount**: Your deposited collateral tokens * **Value**: Current USD value of collateral * **Weight**: Collateral weight (typically 65%) **2. Debt** * **Amount**: Borrowed debt tokens * **Value**: Current USD value of debt * **Interest Rate**: Current borrow rate **3. Supply** * **Amount**: Tokens supplied to lending market * **Value**: Current USD value of supplied tokens * **Interest Rate**: Current lending rate #### Share System **Deposit Shares** * **Your Share**: Your proportional ownership of total deposits * **Total Shares**: Total deposit shares in the farm * **Share Value**: Value per share **Debt Shares** * **Your Share**: Your proportional ownership of total debt * **Total Shares**: Total debt shares in the farm * **Share Value**: Value per share **Supply Shares** * **Your Share**: Your proportional ownership of total supply * **Total Shares**: Total supply shares in the farm * **Share Value**: Value per share ### Yield Sources #### 1. Lending Yield * **Source**: Interest earned from supplying tokens to lending markets * **Rate**: Variable based on market conditions * **Payment**: Automatically compounded #### 2. Borrow Incentives * **Source**: Rewards for borrowing activities * **Tokens**: SUI, SCA tokens * **Rate**: Variable based on market conditions * **VeSCA Boost**: Up to 4x multiplier with VeSCA staking #### 3. Protocol Fees * **Source**: Share of fees collected from other users * **Rate**: 70% of total yield distributed to position holders * **Payment**: Automatically distributed ### Risk Management #### Understanding Risks **1. Liquidation Risk** * **What It Is**: Risk of losing collateral if position becomes undercollateralized * **When It Happens**: When collateral value drops below liquidation threshold * **How to Avoid**: Monitor position health and maintain sufficient collateral **2. Interest Rate Risk** * **What It Is**: Risk of changing interest rates affecting profitability * **When It Happens**: Market conditions change utilization rates * **How to Manage**: Monitor market conditions and adjust position if needed **3. Smart Contract Risk** * **What It Is**: Risk of bugs or exploits in smart contracts * **Mitigation**: Protocol undergoes regular audits and security reviews * **Best Practice**: Only invest what you can afford to lose #### Risk Management Tips **1. Position Sizing** * **Don't Over-Leverage**: Keep leverage within comfortable limits * **Diversify**: Don't put all funds in one position * **Start Small**: Begin with smaller amounts to learn the system **2. Monitoring** * **Regular Checks**: Monitor your position regularly * **Set Alerts**: Use price alerts for significant market movements * **Stay Informed**: Keep up with protocol updates and market conditions **3. Exit Strategy** * **Plan Ahead**: Have a plan for market downturns * **Partial Withdrawals**: Consider partial withdrawals during high volatility * **Emergency Exit**: Know how to quickly close positions if needed ### Troubleshooting #### Common Issues **1. Transaction Fails** * **Insufficient Gas**: Increase gas limit or add more SUI tokens * **Slippage**: Adjust slippage tolerance for volatile markets * **Network Congestion**: Wait for network congestion to clear **2. Position Not Showing** * **Refresh Page**: Try refreshing the page * **Check Wallet**: Ensure wallet is connected and on correct network * **Wait for Confirmation**: Some transactions take time to process **3. Rewards Not Updating** * **Wait for Epoch**: Rewards update at protocol compounding * **Check Position**: Ensure position is active and healthy * **Contact Support**: If issues persist, contact support #### Getting Help **1. Documentation** * **User Guides**: Comprehensive guides for all features * **FAQ Section**: Answers to common questions * **Video Tutorials**: Step-by-step video guides **2. Community Support** * **Discord**: Real-time support and discussions * **Telegram**: Community chat and announcements * **GitHub**: Technical support and bug reports **3. Direct Support** * **Support Ticket**: Submit a support ticket for specific issues * **Email**: Contact support team directly * **Social Media**: Reach out on Twitter or Discord *** **Congratulations!** You've successfully started farming with Jewel Scallop Yield Farm. Remember to monitor your position regularly and stay informed about market conditions. For more detailed information, check out our Position Management and SUI/Gauge guides. *Need help? Check out our FAQ or join our Discord community!* # Position Management ### Overview Position management is a crucial aspect of successful yield farming with Jewel Scallop Yield Farm. This guide covers all the tools and strategies you need to effectively manage your farming positions, optimize returns, and manage risks. ### Understanding Your Position #### Position Components **1. Jewel Position NFT** * **Unique Identifier**: Each position has a unique NFT ID * **Ownership**: NFT represents your ownership of the position * **Transferable**: Can be transferred to other addresses * **Metadata**: Contains position details and performance history **2. Collateral** * **Deposited Amount**: Your collateral tokens locked in the position * **Current Value**: Real-time USD value of your collateral * **Collateral Weight**: Percentage that can be borrowed against (typically 65%) **3. Debt** * **Borrowed Amount**: Debt tokens borrowed against your collateral * **Current Value**: Real-time USD value of your debt * **Interest Rate**: Current borrow rate (variable) **4. Supply** * **Supplied Amount**: Tokens supplied to lending markets * **Current Value**: Real-time USD value of supplied tokens * **Interest Rate**: Current lending rate (variable) #### Share System **Deposit Shares** * **Your Shares**: Your proportional ownership of total deposits * **Total Shares**: Total deposit shares in the farm * **Share Value**: Value per share (increases over time) **Debt Shares** * **Your Shares**: Your proportional ownership of total debt * **Total Shares**: Total debt shares in the farm * **Share Value**: Value per share (increases over time) **Supply Shares** * **Your Shares**: Your proportional ownership of total supply * **Total Shares**: Total supply shares in the farm * **Share Value**: Value per share (increases over time) ### Position Operations #### Adding Liquidity **When to Add Liquidity** * **Market Opportunities**: When you want to increase your position size * **Dollar-Cost Averaging**: Adding to your position over time * **Reward Reinvestment**: Reinvesting earned rewards **How to Add Liquidity** 1. **Navigate to Position**: Go to your position dashboard 2. **Click "Add Liquidity"**: Find the add liquidity button 3. **Enter Amount**: Specify the amount to add 4. **Review Details**: Check the impact on your position 5. **Approve Transaction**: Confirm the transaction **Impact of Adding Liquidity** * **Increased Deposits**: More collateral in your position * **Increased Borrowing**: Protocol borrows more debt tokens * **Increased Supply**: More tokens supplied to lending markets * **Higher Rewards**: Proportional increase in all reward streams #### Removing Liquidity **When to Remove Liquidity** * **Profit Taking**: Taking profits from successful positions * **Risk Management**: Reducing exposure during high volatility * **Portfolio Rebalancing**: Adjusting your overall portfolio * **Emergency Withdrawal**: Need for immediate liquidity **How to Remove Liquidity** 1. **Navigate to Position**: Go to your position dashboard 2. **Click "Remove Liquidity"**: Find the remove liquidity button 3. **Enter Amount**: Specify the amount to remove 4. **Review Impact**: Check the impact on your position 5. **Approve Transaction**: Confirm the transaction **Partial vs Complete Removal** * **Partial Removal**: Remove a portion of your position * **Complete Removal**: Close the entire position * **Fees**: Shortfall fees may apply for large removals ### Advanced Position Management #### Position Monitoring **Key Metrics to Track** * **Total Value**: Current value of your position * **Deposited Amount**: Amount of collateral deposited * **Borrowed Amount**: Amount of debt borrowed * **Health Factor**: Position health and liquidation risk * **Current APR**: Real-time APR calculation * **VeSCA Boost**: Current boost multiplier **Monitoring Tools** * **Dashboard**: Real-time position overview * **Analytics**: Historical performance data * **Alerts**: Price and health factor alerts * **Reports**: Detailed position reports #### Risk Management **Health Factor Monitoring** * **Health Factor**: Ratio of collateral to debt * **Liquidation Threshold**: Minimum health factor required * **Safety Margin**: Buffer above liquidation threshold * **Alerts**: Notifications when health factor drops **Risk Mitigation Strategies** * **Add Collateral**: Increase collateral to improve health factor * **Reduce Debt**: Pay down debt to reduce risk * **Close Position**: Close position if risk becomes too high * **Diversify**: Spread risk across multiple positions ### Reward Management #### Understanding Rewards **Reward Types** * **Lending Yield**: Interest from supplying tokens * **Borrow Incentives**: Rewards for borrowing activities * **VeSCA Boost**: Enhanced rewards from VeSCA staking * **Protocol Fees**: Share of protocol fee collection **Reward Distribution** * **Automatic**: Rewards are automatically added to your position * **Compounding**: Rewards are reinvested for compound growth * **Real-time**: Rewards update in real-time * **Transparent**: All rewards are visible and trackable #### Compounding Rewards **Automatic Compounding** * **Enabled by Default**: Rewards are automatically compounded * **No Action Required**: No manual intervention needed * **Optimal Growth**: Maximizes compound returns * **Gas Efficient**: Batched transactions for efficiency **Manual Compounding** * **Trigger Compounding**: Manually trigger reward compounding * **Timing Control**: Choose when to compound rewards * **Gas Optimization**: Batch multiple operations * **Strategy Flexibility**: Implement custom compounding strategies #### Reward Optimization **VeSCA Staking** * **Boost Multiplier**: Up to 4x boost on incentive rewards * **Lock Period**: Longer locks provide higher multipliers * **Amount**: More VeSCA = higher boost potential * **Timing**: Stake during high incentive periods **Position Sizing** * **Optimal Size**: Balance between returns and risk * **Fee Efficiency**: Larger positions have better fee efficiency * **Diversification**: Don't put all funds in one position * **Risk Management**: Keep position size within risk tolerance ### Position Analytics #### Performance Tracking **Key Performance Indicators** * **Total Return**: Overall return on investment * **APR**: Annual percentage rate * **APY**: Annual percentage yield (with compounding) * **Sharpe Ratio**: Risk-adjusted returns * **Maximum Drawdown**: Largest peak-to-trough decline **Historical Data** * **Daily Returns**: Daily return calculations * **Monthly Returns**: Monthly return summaries * **Year-to-Date**: Performance since beginning of year * **All-Time**: Performance since position creation #### Market Analysis **Market Conditions** * **Utilization Rate**: Current market utilization * **Interest Rates**: Current lending and borrowing rates * **Incentive Rates**: Current incentive reward rates * **VeSCA Multiplier**: Current VeSCA boost multiplier **Trend Analysis** * **Rate Trends**: Historical interest rate trends * **Utilization Trends**: Market utilization over time * **Reward Trends**: Historical reward rates * **Performance Trends**: Position performance over time ### Troubleshooting #### Common Issues **1. Position Not Loading** * **Refresh Page**: Try refreshing the page * **Check Wallet**: Ensure wallet is connected * **Network Issues**: Check for network connectivity problems * **Contact Support**: If issues persist **2. Transaction Failures** * **Insufficient Gas**: Increase gas limit * **Slippage**: Adjust slippage tolerance * **Network Congestion**: Wait for congestion to clear * **Insufficient Funds**: Ensure sufficient token balance **3. Rewards Not Updating** * **Wait for Epoch**: Rewards update at specific intervals * **Check Position**: Ensure position is active * **Refresh Data**: Try refreshing the data * **Contact Support**: If issues persist #### Getting Help **Self-Service Options** * **Documentation**: Comprehensive guides and tutorials * **FAQ**: Answers to common questions * **Video Tutorials**: Step-by-step video guides * **Community Forums**: User discussions and help **Direct Support** * **Discord**: Real-time support and discussions * **Support Ticket**: Submit a support ticket * **Email**: Contact support team directly * **Social Media**: Reach out on Twitter ### Best Practices #### Position Management * **Regular Monitoring**: Check positions regularly * **Risk Management**: Maintain appropriate risk levels * **Diversification**: Spread risk across multiple positions * **Documentation**: Keep records of your positions #### Reward Optimization * **VeSCA Staking**: Maximize VeSCA staking for better rewards * **Compounding**: Enable automatic compounding * **Timing**: Consider market timing for operations * **Fees**: Factor in transaction fees when making decisions #### Risk Management * **Position Sizing**: Don't over-leverage positions * **Health Monitoring**: Monitor health factors regularly * **Exit Strategy**: Have a plan for market downturns * **Emergency Procedures**: Know how to quickly close positions *** **Position management is key to successful yield farming.** By understanding your positions, managing risks, and optimizing rewards, you can maximize your returns while maintaining appropriate risk levels. For more advanced strategies, check out our VeSCA Integration guide. *Need help with position management? Check out our FAQ or join our Discord community!* # JWLXRD Liquid Staking ## **Introduction** #### **Token Addresses:** JWLXRD - resource\_rdx1tklsaw4evqgmue59v7c87qm79tx2ppjp93ycxek8shrlmz426h7axq SJWLXRD - resource\_rdx1t5dpa60xk9a3092z8ed5wcr82y9m9xfv4eyjcdfyg7d3j4r7rhfx5p JewelSwap introduces innovative Dual-Token Liquid Staking, allowing everyone to benefit from the higher APY than traditional staking providers due to the **two-way** mechanism of staking: **minting** and **staking.** Fundamentally not all users, who converted **XRD into JWXRD** will stake it (to receive rewards) but rather will participate in liquidity creation in the **JWLXRD-XRD pool on** [**Ociswap**](https://ociswap.com/pools/component_rdx1czuprfuvc3rd9n9ms9t7ge2m53mp2mux9cparytzz77ct8xjrf0h3v/)**.**
#### **Minting** JWLXRD is a derivative token that can be minted using XRD. JWLXRD **can** make use of [POL](/other-resources/definitions/jewelswap-protocol-owned-liquidity-pol) by minting 1.1 JWLXRD per deposited XRD. ***This does not mean JWLXRD is not 1:1 backed.*** JWLXRD ***is 1:1 backed***. Please read up on how [POL](/other-resources/definitions/jewelswap-protocol-owned-liquidity-pol) works, what it does, and how the backing is ensured.

Minting JWLXRD with XRD

*** #### **Staking** Staking JWLXRD will give the user SJWLXRD, which appreciates in value against JWLXRD. The XRD used to mint JWLXRD are staked across multiple validators on Radix. The staked XRD generates rewards during the day. The rewards are paid out, when staking providers distribute yield. Therefore, the ratio between SJWLXRD and JWLXRD rises once a day, as it is triggered daily. SJWLXRD can be transferred between wallets too. This allows you to transfer your ownership to another wallet, without having to unstake your SJWLXRD. *** #### **Rewards** Rewards for JWLXRD staking stem from these sources: * XRD used to mint JWLXRD is staked at various staking providers on Radix to generate yield. *** #### **Unstaking** Unstaking SJWLXRD for JWLXRD is possible **instantly** and at no fees. *** #### Swapping You can swap JWLXRD at varying market rates on Ociswap. *** #### **Redemption/Unbonding - Unbonding NFT - Redemption Fees** JWLXRD is redeemable in a 1:1 ratio for normal XRD.\ The unbonding period for JWLXRD is 10 days. When unbonding, you receive an NFT from JewelSwap - **XRD claim NFT**\ This is a so-called [**unstaking/unbonding NFT**](/other-resources/definitions#unstaking-unbonding-nfts)**.**
You can use this NFT to send it to a different wallet.\ You need the unstaking NFT to claim your XRD after those 10 days. The NFT proofs your ownership of the unbonding JWLXRD. **Most of the time, there are no fees associated with redeeming JWLXRD.**\ A dynamic fee mechanism may decide to start charging a small fee when redeeming JWLXRD.\ This mechanism adds a redemption fee **in case of high redemption requests**. This system is not yet in place and will be added in case further DeFi integrations for JWLXRD are implemented in the future. *** #### **Fees** 10% of the generated rewards from XRD staking are kept by JewelSwap. 90% are going to SJWLXRD. # JWLSOL Liquid Staking #### **Introduction** JewelSwap introduces innovative Dual-Token Liquid Staking, allowing everyone to benefit from the higher APY than traditional staking providers due to the **two-way** mechanism of staking: **minting** and **staking.** Fundamentally not all users, who converted **SOL into JWLSOL** will stake it (to receive rewards) but rather will participate in liquidity creation in the **JWLSOL-SOL pool on Orca.** #### **Minting** JWLSOL is a derivative token that can be minted using SOL. JWLSOL **can** make use of [POL](/other-resources/definitions/jewelswap-protocol-owned-liquidity-pol) by minting 1.1 JWLSOL per deposited SOL. ***This does not mean JWLSOL is not 1:1 backed.*** JWLSOL ***is 1:1 backed.*** Please read up on how [POL](/other-resources/definitions/jewelswap-protocol-owned-liquidity-pol) works, what it does, and how the backing is ensured.
*** #### **Staking** Staking JWLSOL will give the user SJWLSOL, which appreciates in value against JWLSOL. The SOL used to mint JWLSOL are staked across multiple validators on Solana. The staked SOL generates rewards during the day. The rewards are paid out, when staking providers distribute yield. Therefore, the ratio between SJWLSOL and JWLSOL rises once a day, as it is triggered daily. SJWLSOL can be transferred between wallets too. This allows you to transfer your ownership to another wallet, without having to unstake your SJWLSOL. *** [**Gauge** ](/solana/gauge)**mechanism** The Gauge mechanism decides which validator gets more SOL delegated towards him. Staked JWLSOL is eligible for voting on [Gauge ](/solana/gauge)governance. *** #### **Rewards** Rewards for JWLSOL staking stem from these sources: * SOL used to mint JWLSOL is staked at various staking providers on Solana to generate yield. *** #### **Unstaking** Unstaking SJWLSOL for JWLSOL is possible **instantly** and at no fees. *** #### Swapping You will be able to swap JWLSOL at varying market rates on Orca. *** #### **Redemption/Unbonding - Unbonding NFT - Redemption Fees** JWLSOL is redeemable in a 1:1 ratio for normal SOL.\ The unbonding period for JWLSOL is 10 days. When unbonding, you receive an NFT from JewelSwap - **SOL claim NFT**\ This is a so-called [**unstaking/unbonding NFT**](/other-resources/definitions#unstaking-unbonding-nfts)**.** You can use this NFT to send it to a different wallet.\ You need the unstaking NFT to claim your SOL after those 10 days. The NFT proofs your ownership of the unbonding JWLSOL. **Most of the time, there are no fees associated with redeeming JWLSOL.**\ A dynamic fee mechanism may decide to start charging a small fee when redeeming JWLSOL.\ This mechanism adds a redemption fee **in case of high redemption requests**. This system is not yet in place and will be added in case further DeFi integrations for JWLXRD are implemented in the future. # Gauge ## Overview The term "Gauge" refers to the governance voting process carried out by JWLSOL stakers. These stakers have the privilege of casting their votes in favor of their preferred validator or staking provider. It's important to note that only validators who have been whitelisted are eligible to be subjected to these votes. {% hint style="info" %} If you are a validator, interested in becoming whitelisted for Gauge voting and receiving a part of the SOL used to mint JWLSOL, please contact us. {% endhint %} This system empowers JWLSOL stakers to determine which validator should receive a larger share of the deposited SOL, which is used to mint JWLSOL through delegation. The voting percentages are regularly updated every epoch on Thursdays. * Voting percentages will be updated every epoch on Thursday. * Each gauge vote can only be voted on every 10 days. * The amount of SOL being delegated to a validator is dependent on the percentage of votes that validator received. * When it comes to undelegated SOL, it will be systematically undelegated in order, starting from the least voted validator and moving towards the most voted validator.
# Bug Bounty The security of users is paramount and the protocol offers a Bug Bounty program. User can submit reports of "bugs” or vulnerabilities for a chance to earn rewards. The program aims to incentivise responsible disclosure and enhance the security of the protocol. **The wallet addresses of Bug Exploiters** (users who exploited bugs instead of reporting them responsibly) **will be blacklisted by the protocol** for security reasons and potential funds recovery. **Once blacklisted, these addresses will not be able to initiate any transaction with the protocol.** The terms and conditions of the rewards are solely at the discretion of the team. # Use of Protocol The robustness of the protocol is of utmost importance. **Any user found to have engaged in bad faith towards the use of the protocol will have their wallets blacklisted.** Blacklisted wallets will not be able to take on any new loans or renew existing ones. Examples of bad faith actions include, but are not limited to: purposeful default on loans, repeated liquidations, and attempts at bug exploitation. The terms and conditions are solely at the discretion of the team. # Safety and Security ### Introduction At JewelSwap, our commitment to the safety and security of our platform is paramount. We understand the critical importance of trust in the decentralized finance (DeFi) ecosystem. To uphold our promise of providing a secure and reliable platform, we conduct rigorous audits of our smart contracts and systems. ### What is a Smart Contract Audit? A smart contract audit is a comprehensive examination conducted by independent security experts. The audit involves scrutinizing the smart contract code to identify vulnerabilities, bugs, and potential security threats. This process ensures that our smart contracts function as intended and are secure from external attacks. ### Executed Audits So far, the following modules were audited by independent 3rd party auditors
Module/FeatureAudited byURI
S/JWLEGLDArdahttps://arda.run/audits/jewelswap
# Twitter Thread Guides 1. **Mortgage Guide** \ [https://twitter.com/ElrondPunks/status/1639235670916104192](https://twitter.com/ElrondPunks/status/1639235670916104192?s=20) 2. **Borrowing / Mortgage Guide** by Robolteanu\ [https://twitter.com/robolteanu/status/1640300535839617026](https://twitter.com/robolteanu/status/1640300535839617026?s=20) 3. **Lending / Borrowing** by Davy.EGLD\ [https://twitter.com/Davyegld/status/1639960452401864704](https://twitter.com/Davyegld/status/1639960452401864704?s=20) 4. **DCA Buy/Sell Pool Guide** \ [https://twitter.com/ElrondPunks/status/1634433360532750339](https://twitter.com/ElrondPunks/status/1634433360532750339?s=20)[https://twitter.com/ElrondPunks/status/1634169282425913344](https://twitter.com/ElrondPunks/status/1634169282425913344?s=20) 5. **AMM 2-sided Liquidity Pool Guide** \ [https://twitter.com/ElrondPunks/status/1634123948580544515](https://twitter.com/ElrondPunks/status/1634123948580544515?s=20) 6. **JewelSwap Guide by Stephen** \ [https://twitter.com/the\_economystic/status/1648539753304961024](https://twitter.com/the_economystic/status/1648539753304961024?s=20) 7. **JewelSwap Guide by Marchel** \ [https://twitter.com/MariuszMarchel/status/1648954558960287747](https://twitter.com/MariuszMarchel/status/1648954558960287747?s=20) 8. **JewelSwap Lending and Borrowing Guide by Foudres** \ [https://twitter.com/xFoudres/status/1651148449784496129](https://twitter.com/xFoudres/status/1651148449784496129?s=20) 9. **JewelSwap Mortgage Guide by Foudres** \ [https://twitter.com/xFoudres/status/1651529087133925378](https://twitter.com/xFoudres/status/1651529087133925378?s=20) 10. **JewelSwap AMM Guide by Foudres** \ 11. **JewelSwap Leveraged Yield Farming Guide by Loulou** \ [https://twitter.com/loulou\_msx/status/1654880284364492801](https://twitter.com/loulou_msx/status/1654880284364492801?s=20) 12. **JewelSwap Leveraged Yield Farming (LYF) Guide by Robolteanu.** 13. **JewelSwap Leveraged Yield Farming Guide by Davy.** \ [https://twitter.com/Davyegld/status/1659152082350252033](https://twitter.com/Davyegld/status/1659152082350252033?s=20) # Video Guides 1. Great coverage by EGLDsavvy on NFT Lending and profitability of JewelSwap (**English**)\ 2. JewelSwap Youtube Guide by Bitcoin Conteau (**French**)\ 3. JewelSwap Youtube Guide by Riga.Crypto (**Romanian**)\ # Definitions #### **Collateral** Collateral are digital assets provided by a borrower to secure a loan. These assets, typically cryptocurrencies, NFTs or other tokens, act as a safeguard for the lender or platform. **If the borrower fails to repay, the lender can seize and liquidate the collateral.** The valuation of the collateral, crucial for loan approval, is based on its current market value in the crypto market. #### **Liquidate/Liquidation** In the context of collateral, **to liquidate means to convert the digital assets (such as cryptocurrencies, NFTs, or other tokens) provided as security for a loan into cash or a more liquid form of asset.** This process is typically initiated when the borrower fails to repay the loan. **The lender or platform**, holding these digital assets as collateral, **will sell or exchange them in the market to recover the loan amount.** The act of liquidation is a key mechanism to mitigate financial risk, ensuring that the lender can recoup their funds even in cases of default. The effectiveness of liquidation largely depends on the current market value and liquidity of the collateralized assets. #### **APY (Annual Percentage Yield)** This is the rate of return earned on an investment over a year, **accounting for the effects of** **compounding interest**. Unlike simple interest (APR - annual percentage rate), APY considers interest earned on both the principal and the accumulated interest from previous periods. It's a key metric in finance, used to compare the profitability of savings accounts, investments, and other financial products. The higher the APY, the more lucrative the investment. #### **Decentralized Exchange (DEX)** A DEX is a blockchain-based platform allowing direct cryptocurrency and token trading without intermediaries. It's transparent, and non-custodial, meaning users control their funds. DEXs typically use smart contracts for trade automation and liquidity pools for facilitating trades. They provide anonymity and reduce central failure risks but may have slower transactions and less intuitive interfaces compared to centralized exchanges. #### Automated Market Maker (AMM) An (AMM) is a type of protocol used in decentralized finance (DeFi) to facilitate automatic and permissionless trading of digital assets. Instead of using traditional order books, AMMs rely on mathematical formulas to set the price of assets based on their supply and demand in liquidity pools. These pools are funded by users who deposit assets and earn trading fees in return. This system allows for continuous and decentralized trading, eliminating the need for a traditional market maker or counterparty in trades. **An AMM is always a DEX, but not every DEX is based on an AMM model.** #### Impermanent Loss Impermanent loss occurs in DeFi liquidity pools, especially those using AMM. It happens when the price of assets in a pool changes from the time they were deposited. If asset prices diverge significantly, and a liquidity provider withdraws their assets, **they might find the value of their withdrawal less than if they held the assets outside the pool**. This loss is 'impermanent' because it's not realized until withdrawal. The extent of the loss depends on the magnitude of price changes and can be mitigated by transaction fees earned in the pool. Understanding this risk is essential for anyone participating as a liquidity provider in AMM pools. #### Arbitrage Arbitrage in the financial context, particularly in cryptocurrency, refers to the practice of capitalizing on a price difference of an asset across different markets or exchanges. **Traders engaging in arbitrage buy an asset where it's cheaper and simultaneously sell it where it's more expensive, profiting from the price discrepancy.** This process is often automated and executed rapidly to take advantage of often fleeting arbitrage opportunities. Effective arbitrage requires a keen understanding of market dynamics and access to multiple trading platforms. It's a risk mitigation and profit strategy that relies on market inefficiencies. #### Dollar Cost Averaging (DCA) DCA is an investment strategy used to reduce the impact of volatility on large purchases of financial assets, including cryptocurrencies and stocks. **This strategy involves dividing the total amount to be invested across periodic (automatic) purchases of a target asset at regular intervals, regardless of the asset's price at each interval.** By spreading the investment over time, DCA reduces the risk of investing a large amount in a single market condition. This approach can potentially lower the average cost per share of the asset, as it buys more shares when prices are low and fewer when prices are high. DCA is especially favored by long-term investors seeking to mitigate the risks associated with market fluctuations. #### **Spot Price** The **spot price**, **or also known as the current market price** is the price at which an asset, like a cryptocurrency, commodity, NFT or security, can be bought or sold for **immediate delivery**. Unlike future prices, which are based on expectations of future supply and demand, the spot price reflects **real-time market conditions** and is constantly changing due to factors like trading activity, market news, and broader economic indicators. **In the crypto market, the spot price of a digital asset (such as coins, tokens and NFTs) is determined by the latest trades executed on exchanges**, providing a live snapshot of its value. It's essential for traders and investors to track spot prices for timely decision-making in buying or selling assets. #### Unstaking/Unbonding NFTs Unstaking/Unbonding NFTs are basically **a receipt**, given out by the liquid staking provider. T**hey proof that you have started to unstake a token** from a staking protocol. **To claim the asset after the unbonding period (usually 10 epochs/10 days), you need to send the NFT back to the protocol.** The protocol burns the NFT (the receipt) and you receive the asset. This system allows users to trade their NFTs, perhaps sell it to someone at a slightly lower price, which allows them to immediatelly access most of their money without having to wait 10 days.\ The NFTs can also be used on loan patforms to take out a loan against the NFTs value, to immediatelly access the majority of the assets, without having to wait a long time and paying high fees. #### Epoch **For many networks, 1 epoch is usually around 1 day (24 hours) long.** But this is not the case for all networks. **MultiversX:** 1 epoch is usually 1 day (24 hours)\ **Solana:** 1 epoch is usually 2-3 days\ **SUI:** 1 epoch is usually 1 day (24 hours)\ **Radix:** 1 epoch can be between 30-90 minutes, is dynamically adjusted by the protocol An epoch in blockchain networks is a specific time period or interval during which certain network activities and processes are grouped together. This concept is particularly important in Proof of Stake (PoS) and its variants, where it plays a crucial role in network operations. In other words, it is a typically fixed, but sometimes variable time period typically found on Proof-of-Stake networks. Usually the native staking reward distribution is tied to an epoch, or other aspects of the network, such as inflation, protocol upgrades, validator selection etc. #### **Bonding curve** **In short:** The bonding curve defines how much the price changes when buys or sells occur. A bonding curve is a **mathematical formula** used in token economics that **governs the relationship between the price of a token and its available supply**. The bonding curve defines a price function that automatically adjusts the price of the token based on its supply, increasing the price as the supply grows and decreasing it as the supply decreases. This creates a continuous and automated market for the token, allowing users to buy and sell the token at any time, while also providing liquidity to the market. **The bonding curve concept is often used in decentralized finance (DeFi) applications, such as Automated Market Makers (AMMs) and token distribution mechanisms.** #### Delta (in Trading) Delta, in the context of trading, particularly in automated market makers (AMMs) like JewelSwap, refers to the amount or percentage by which the price of an asset (such as an NFT) increases or decreases after each trade. * The **exponential delta** is based on **percentage movements**. If the delta is 5%, then after each buy, the price will increase by 5%, leading to exponential growth. * The **linear delta** on the other hand ensures that the price changes by a **fixed amount**, for example 0.05 EGLD. Delta is a crucial parameter that influences the price volatility of assets within a liquidity pool. A higher delta means larger price adjustments after each transaction, leading to more significant price fluctuations. Conversely, a lower delta results in smaller price changes, offering more stability in asset prices. This mechanism plays a key role in managing the liquidity and pricing dynamics of assets in AMM platforms, affecting both the market maker's strategy and the traders' willingness to engage in buying or selling activities. #### Soft-Peg A soft-peg cryptocurrency or token aims to maintain a stable value relative to another asset, but allows for some fluctuation around the target price. The peg is defined through it's open market trading price. #### Hard-Peg A hard-peg cryptocurrency or token is designed to maintain a fixed exchange rate with another asset. This is usually achieved through full collateralization, where each token is backed 1:1 by the pegged asset held in reserve and redeemable for it's backing. Hard-pegged tokens aim for minimal price deviation from their target value.
# JewelSwap Protocol Owned Liquidity (POL) ### Overview JewelSwap Protocol Owned Liquidity Provision (POL) is a novel system within the JewelSwap ecosystem designed to optimize liquidity for the JWL derivative tokens. This system introduces a unique approach to liquidity provision.\ The main benefits are deeper liquidity in the AMM pool, which enhances the trading experience and ensures price stability for the JWL derivative tokens. All of this while with the aim of maintaining a 1:1 backing. *** ### How POL Works #### 1. **Token Minting and Allocation** * **Initial Deposit**: When a user deposits 1 primary token, additional derivative tokens are minted as protocol-owned liquidity (dynamically determined - varying between JWL-tokens). **For the following examples, we assume 1.3 derivative tokens are minted.** * **Liquidity Provision**: Out of these 1.3 minted derivative tokens, 0.3 derivative tokens and 0.3 of the user-deposited primary tokens are allocated to liquidity provision. This liquidity is **protocol-owned liquidity** and can not be touched, enhancing the market-price stability of the stable token by increasing the depth of the available liquidity. * **Staking**: The remaining 0.7 primary tokens are staked or used in their respective revenue generating fashion (depending on the JWL token). #### 2. **Reward Distribution** * Users who stake their JWL-tokens receive rewards from several sources: * Rewards generated by the 0.7 primary tokens. * **Depending on the JWL-token**: A portion of the generated fees from the respective JewelSwap module. #### 3. **Redemption Mechanism** * If a user tries to redeem a derivative token, primarily, the primary tokens will be unstaked/removed from it's revenue generating source and returned to the user after the unbonding period. But in the event of there being too little primary tokens available, JewelSwap will remove part of the AMM liquidity and the excess JWL tokens will be burned, maintaining/improving the 1:1 backing. * It is also very important to note, that a derivative token utilizing POL, may not utilize POL forever and that the degree of how many tokens are minted for POL can vary. > *"But, more* derivative *tokens are being minted, compared to what is being deposited, does that mean there's additional stablecoins circulation that is not backed?* **No. It does not.** The extra minted derivative-tokens, together with the same amount of deposited primary tokens, are used to provide liquidity. This ensures there is a deeper liquidity in the system for swaps and acts as an additional conduit for swaps. **The tokens are backed at the point of the swap.**\ If many/big redemptions happen, some of the liquidity in the pools will be withdrawn for redemptions, as described above, and the withdrawn derivative tokens will be burned. Furthermore, the minted tokens are exclusively used to provide liquidity for swaps. They cannot hurt the price of the stable token, as POL tokens are not being sold. JWL derivative tokens cannot leave the system without the adequate amount of primary (backing) tokens being provided. *** ### Benefits of POL **Enhanced Liquidity**: The system increases the liquidity for the derivative token, ensuring its stability and usability. Without affecting the rewards for the stakers, the stable token can enjoy a deeper liquidity and thus more price stability on the open market, which is beneficial to the [soft-peg](/other-resources/definitions) and benefits traders and liquidity providers through lower slippage. *** ### Conclusion JewelSwap's POL represents an innovative approach to liquidity management in the DeFi space. POL establishes a solid foundation for the stable tokens by creating additional stable liquidity. The deeper liquidity for the stable tokens enhances their utility and price stability for users within the JewelSwap ecosystem.