DappRadar Enters ApeSwap’s Sustainable Liquidity Mining Program
“ApeSwap has some of the best business development on the market” — noted Skirmantas, one of the co-founders of DappRadar, after our final meeting going over ApeSwap’s brand new program: Sustainable Liquidity Mining.
Building strong relationships and providing best-in-class solutions is what we do inside the ApeSwap DAO, and quite frankly — we believe we do it very well.
This partnership ushers in a new era for ApeSwap and our industry, introducing the first way to sustainably source liquidity, bringing one of the largest players in the crypto space to BNB Chain, and starting a new, long-term relationship between two incredible projects.
Welcome home, DappRadar!
We’re excited to kick off this partnership for a number of reasons, but the most notable development is how DappRadar is committing to sourcing sustainable liquidity using this new program from ApeSwap’s dexenomics team.
Why did ApeSwap create Sustainable Liquidity Mining (SLM)?
We invented SLM as a response to the DeFi 2.0 conversations that took our industry by storm at the end of 2021. ApeSwap has recently started building sustainable liquidity using our Treasury Bills products, which allows users to sell their liquidity provider tokens (APE-LPs) in exchange for discounted tokens. We tested this product with our own token through BANANA Bills, and given their success, we are encouraging all of our close partners to join us to create their own Jungle Bills.
The best part is that ApeSwap is the ONLY place in crypto where you can tap into SLM because of our unique product suite. We offer the only “one-stop shop” solution on the market because we have liquidity mining, Treasury Bills, and a DEX under one roof. Through managing these multiple products we have developed a proprietary methodology called “dexenomics” that determines a custom plan for every project by considering their tokenomics, market cap, volume in congruence with this 100% unique offering.
Sustainable liquidity mining is the future of our industry and should be at the forefront of every project’s long-term plan to source liquidity.
How does SLM work?
SLM consists of two stages, a renting phase and an ownership phase. Before we dive in, let’s define renting and owning, and note the pros and cons of each strategy.
Renting: The process of giving away protocol tokens in order to generate short-term liquidity. This is commonly referred to as farming, and can take shape in many forms. For example, projects can trade pool tokens for native DEX rewards, or fund yield farms directly with project tokens.
Fun fact: 95%+ of the projects in our industry currently rely solely on rented liquidity.
One of the drawbacks to renting liquidity is that the project gives away tokens for $0 and receives 0% in return. For every $1 the project spends, they get back $0 — that’s not a great return. The only certain outcome is that short-term liquidity WILL dry up once the project stops spending token on incentivizing liquidity through rewards. Basic finance fundamentals tell us that investors take profits and mitigate risk, so it’s common sense to realize that liquidity providers will farm for these incentives, sell the reward tokens, and remove their liquidity over a long enough time horizon, leaving the project empty-handed.
Want examples? Reach out to ApeSwap’s business development team and we’ll blow your mind with the data.
Owning: The process of selling protocol tokens at a discount to acquire permanent liquidity for the project. ApeSwap achieves this using our Treasury Bills product.
The primary benefit to owned liquidity is that a project trades tokens for a predictable return. For every dollar spent funding discounted token rewards through Treasury Bills, a project can recoup up to 95% of the value spent on incentives.
Bringing It All Together
Our program is based on a few fundamental facts we have seen in the industry.
- Renting liquidity is not sustainable long term
- Renting liquidity is still useful for bootstrapping initial liquidity
- Owning liquidity offers an infinite times better return on the rewards spend compared to using tokens to incentive renting
Regarding point #3, we are not exaggerating! If I asked you to give away $1 for $0 in return, or for $0.50 in return, which would you choose? Now I’m just an user, but I’ll take the $0.50 every single time. That’s what SLM unlocks for projects, and a $0.50 return is infinitely better than $0.
The program starts with renting to bootstrap initial liquidity needed, then we work with the project to phase out farming while we kickstart Jungle Bills. Over time, we stop renting and the project is fully supported through protocol-owned liquidity (POL). That’s the beauty of sustainable liquidity mining.
If you are a project interested in SLM, reach out to work with ApeSwap today here!
DappRadar and the Future of ApeSwap’s SLM Program
DappRadar is going to be the first project to commit to going through the full program on BNB Chain.
Renting Phase: Launching on July 6th to bootstrap RADAR-BNB liquidity on BNB Chain
- Will include a “Stake GNANA, Earn RADAR” Staking Pool
- Will include a “Stake RADAR-BNB LPs, Earn BANANA” BANANA Farm
Owning Phase: Launching on July 8th to kickstart protocol-owned liquidity
- Will include a Jungle Bill to trade RADAR-BNB APE-LPs for discounted RADAR, vested over a period of time.
From there we will monitor and continue to sell additional allocations of Jungle Bills to meet DappRadar’s liquidity needs over the coming quarters. We have more cross-chain plans together as well, so stay tuned!