How to contribute liquidity and earn rewards

Think people should be able to buy and sell crypto without being spied on? Excellent. This tutorial will show you how to contribute liquidity and earn rewards for helping people trade privately.

How it works

When you contribute liquidity to any pair, you earn trading fees in those currencies, e.g. USDT and XMR and liquidity mining rewards in PRV (this is only applied for the whitelisted pairs).

1. Join a reward-earning pool

The real-time APR represents current earnings from trading fees of that pair. A liquidity pool consists of a pair of 2 tradable currencies. To join a pool, both sides of the pair must be contributed, at a rate determined by the current trading price.

APR adapts in real-time based on 2 factors – liquidity and trading volume of a particular pool. The formula for determining APR is trading fees earned over 1 year (extrapolated from the last 7 days), divided by current pool liquidity. APR does not take into account any impermanent loss.

To see a list of reward earning pools and their respective APRs, access the Earn tab from bottom bar.

Tap on a pair to contribute liquidity for it.


Once you’ve contributed liquidity, you’ll see it reflected on this page. Here you’ll see all the pools you’ve invested in, and the rewards you’ve earned (a total of fees collected).

2. Contribute or remove liquidity any time

Simply tap on the pair to pull up details of your contribution. You’ll be given the option to invest more, or remove your contribution.

3. Manage your rewards

Rewards are paid out every block (~40s). They do not compound, and can be withdrawn at any time from the rewards tab.

The main screen of the Rewards tab displays your reward totals in USD, but to see currency-specific earnings, just tap on the relevant pair. You’ll see the fees you’ve earned.

Invest more, or withdraw your rewards.

Learn how to provide liquidity and earn rewards >

Download Incognito app and start providing liquidity :iphone:

Appl%20store google-play-badge Download APK

What’s next?

We’re building out this feature and will be adding more varied ways to earn rewards. Watch this space!

Note to old hands: This is the ‘Add’ function reworked (2-sided liquidity contribution, now with rewards). ‘Provide’ is still functional and can be accessed from the ‘More’ tab.

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You should mention yields are backward looking and represent the annualised average of the percentage of total rewards against total liquidity value within the last 7 days and that yields change with general market / trading activity.

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We’ve just changed the UI to make the feature more visible. The original tutorial is also updated correspondingly.
A note for APR was added to the app as well as the topic, thanks for your suggestion @SPAddict25.

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Excellent article @alias - Nice and easy to understand.

For noobs to the Liquidity Pool scene may I suggest including an “Information Icon” :information_source: with a short note that explains how the APR is calculated and perhaps a link to this forum post for more information?

I think it would be wise to include a warning about the risks of impermanent loss and how that may occur. I know this my deter some risk adverse users, but it could be a nice way to introduce them to the less risky one-sided liquidity feature through the amazing “Provide” staking feature.

I think the “Information” bubble within the app can help new App users learn new features within the app and encourage more staking thus growing Incognito Network’s overall Total Value staked.

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Hey! The ‘Information icon’ button which provides needed infor regarding Liquidity pool is already in app. Check the icon in my little red circle :))

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Thanks for pointing this out @Ducky. However, it doesn’t really mention anything about the risks associated (E.g. Impermanent loss) perhaps a link to a community forum post explaining the risks better would be wise.

Also, the information bubble could be used to promote the “Provide” feature for the less risk adverse. Just a thought.

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Hi @Jared, this is an excellent post and it encouraged me to contribute liquidity to help grow the different pools. Thanks @Ducky for answering my questions above.

SOME NOOB QUESTIONS

  1. Pool Ratios
    I noticed some pools have a ratio of 50% : 50% and others have 32% : 68% etc. I’m just curious, do all pools start out as 50% : 50% and then over time change based on price fluctuations, or does the incognito team determine the funding ratio at the time of pool creation and also manually change the pool funding ratios?

  2. Changes to deposited amounts sent to Pools
    I recently contributed 2 small parcels of FTM to the FTM/PRV Liquidity Pool.
    The 1st parcel was for 15 PRV + 75 FTM (17 May) and 2nd parcel was for 28 PRV + 98 FTM (21 May), hence total of 43 PRV + 173 FTM was initially supplied.
    After checking the LP today, I’ve noticed my balance for both PRV and FTM has dropped to: 16.6 PRV + 150.5 FTM.
    Price Analysis:
    The PRV price has remained relatively flat over this period, hovering between $0.55-$0.56.
    The FTM price ran up from $0.35 on 21 May to $0.5 on 24 May, then pulled back to $0.4 at time of writing this post. However the price of FTM is still above the price at which I deposited FTM into the pool.
    I’m a noob to Liquidity Pools and know I’m taking a risk, but I’m trying to understand why my share in both $ Value and Token Qty in the pool is now lower than what I initially deposited.
    Am I missing something, for example, are there any hidden fees when depositing into a pool? If so, this may explain why I’m seeing a smaller balance. But if that was the case why aren’t I seeing any fees in the Wallet Transaction record for the respective “Contribute Requests”?
    Can anyone please explain to a noob why my initial provided balance of tokens has dropped?

Thanks for addressing my questions.

Hi @Linnovations,

I noticed some pools have a ratio of 50% : 50% and others have 32% : 68% etc. I’m just curious, do all pools start out as 50% : 50% and then over time change based on price fluctuations, or does the incognito team determine the funding ratio at the time of pool creation and also manually change the pool funding ratios?

The former is correct. The pool ratio depends on the price fluctuations from the time when the pool is created.

I recently contributed 2 small parcels of FTM to the FTM/PRV Liquidity Pool.
The 1st parcel was for 15 PRV + 75 FTM (17 May) and 2nd parcel was for 28 PRV + 98 FTM (21 May), hence total of 43 PRV + 173 FTM was initially supplied.
After checking the LP today, I’ve noticed my balance for both PRV and FTM has dropped to: 16.6 PRV + 150.5 FTM.

Could you please give us your contributions tx hashes (1st and 2nd parcel)
We will check more detail

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Also give us screenshot of your contributions

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Hi @trungtin2qn1, as per your request, below are screenshots taken from my FTM wallet inside Incognito.

I’ve highlighted the 2 x Contribute TXs from my wallet sent to the FTM-PRV pool (see below)

Here’s screenshot of 1st TX: 75 FTM on 17 May 2022 (see below)

Here’s screenshot of 2nd TX: 98 FTM on 21 May 2022 (see below)

So as you can see, I’ve added a total of 75 + 98 FTM = 173 FTM

Here’s a screenshot taken 26 May 2022 from the “Earn” section in the wallet with the balance (151 FTM) in the Pool (see below)
2022-05-25--FTM-PRV-Pool

QUESTION: Please help me understand what has happened to the missing 22 FTM?

Thanks for your help.

To me, 151.2 FTM is probably normal. Impermanent loss. As you said in your first post, FTM price against PRV went up recently. This market movement increases your PRV and decreases your FTM in the liquidity pool. Here what is not normal is the amount of PRV. It must have been above 43 PRV. Let’s wait for an answer.

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We also need PRV contributed amount

You can follow this order for exactly contributions detail
tab Earn -> Rewards -> icon history -> Choose your contribution here and take a screenshot for us

Here is a screenshot for you to easy to follow

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Thanks for providing the clear instructions as I’ve never clicked on that icon.

Here is the screen shot and as you can see I’m wanting to support the incognito ecosystem by providing to many different pools :slight_smile: .

What I’ve noticed right off the bat is that I listed the PRV amounts wrong. However, do these tiny amount so PRV look correct? Is the historical contribution ratio of FTM:PRV at the time of contribution recorded somewhere so we can make some sense of the contributed amounts (I.E. I’m unsure if it was 50:50 at the time of contribution)?

Hey @trungtin2qn1, I hope the above helps you help explain to me what has happened and whether this is all normal as I’m a little confused.

Thanks for your help.

Many thanks for your support for the incognito ecosystem

However, do these tiny amount so PRV look correct?

Yes the PRV amount is correct. The ratio of FTM:PRV pool in the day which you contributed is about FTM:PRV = 112

Is the historical contribution ratio of FTM:PRV at the time of contribution recorded somewhere

Before add contributions to a single pool, app will show you the ratio between 2 tokens.

Below is a screenshot

But recorded in history is also a good point, maybe we will consider to add this in next improvement

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Thanks for looking into this @trungtin2qn1 and confirming that are as they should be.

Thanks for considering the above improvement to the app as having the “Pool Ratio” recorded in the “Contribution History” would be very helpful given the fact that pool ratios will change over time.

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