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Maya Protocol — Fair Launch + Airdrop: How to participate and maximise profit

By n1ce | DeFi Adventures | 30 Jan 2023


Read my articles first on medium.

Maya protocol will launch their liquidity auction and fair launch on March 7th. They want to bootstrap the protocol and attract lot’s of liquidity to get their cross-chain decentralized exchange going.

Maya is a friendly fork of THORChain. That means they are taking THORChain’s code, modifying it and have a partnership with THORChain’s team. Learn more about the basics of THORChain in my article on the Savers Vault feature.

In short, THORChain allows you to trade Layer 1 crypto like Bitcoin, Ethereum, BNB or even Doge without the need of a centralized entity like an exchange. Send Bitcoin to an address and add your Ethereum address, receive the same dollar amount minus a small fee and slippage to your Ethereum address, no questions asked.

Back to Maya protocol. They found a few ways to tweak THORChains idea.

Improvements on the THORChain design

Two token Model: Instead of just having $RUNE for rewards and liquidity, Maya introduces $CACAO & $MAYA. $CACAO is similar to $RUNE in that it’s paired with all assets (providing the liquidity pairs) and to secure the chain economically. $MAYA has a much more limited supply and will capture 10% of the fees generated by users swapping on Maya protocol. From the website:

They ($MAYA tokens) are essentially a tokenization of our present and future cash flows, hich means that the more active our exchange is, their price will appreciate.
Therefore, $MAYA holders are incentivized to see the protocol grow with time.

The team is paid only in $MAYA tokens, which I think is a great idea. The rest of the token is airdropped, find out more later in this article.

Liquidity Nodes: I don’t fully understand it yet, but I understand that nodes have to bond $CACAO for security but other than on THORChain where it sits idely, on Maya it can be used in liquidity pools and generates extra income, making the protocol more efficient. Read more here.

Security Nodes: As a Cosmos chain, Maya Protocol can lend out their security architecture to other chains and collect “taxes” or user fees.

And there is more like Aztec chain and stable pools. Maybe stuff for another blog. As you can see, these guys are serious about innovating on the THORChain idea. And they are developing this for around two years now and just had their code audited by HalbornSecurity.

I think they are doing a great job positioning themselves professionally. Their docs are on point, they have lot’s of learning material (blogs, even a podcast on spotify) the graphic theme looks great and their ideas are very interesting and well formulated.

Fair Launch & Liquidity Auction

Fair launch on March 7th

Basic Idea: Maya protocol needs to attract a lot of liquidity for their pools to enable trading. They also need to distribute their token to supporters and liquidity providers. The fair launch consists of three steps:

  1. They are collecting supported assets such as $BTC, $ETH and $RUNE. You can send these assets to a specified address and can’t swap or withdraw them during a 21-day timeframe.
  2. Then, 90% of the $CACAO tokens are distributed to the participants proportional to their liquidity contribution. If $BTC is 40% of the liquidity raised, that pool receives 40% of the $CACAO allocation.
  3. Participants become liquidity providers, earning a share of the fees generated by users swapping their assets on Maya.
    Their positions include their originally contributed asset plus the newly received $CACAO.

Assets are pooled 50:50 with $CACAO

Just doubling your assets, sounds a bit too good to be true right? Of course this comes with some risks. We don’t know the price of $CACAO at the moment of trading and it can be quite volatile. As the pools of $CACAO + asset have to be always 50:50, the pool has to either sell parts of the asset or $CACAO to keep the balance. This can go in your favor or not, also depending on your time horizon.

If you believe in a longterm growth of $CACAO and the protocol, you could be fine with this risk. You are earning fees in the meantime as well.

There are also different tiers of providing your liquidity, which come with different lockup periods. See the graphic below for details.

Different tiers for the liquidity auction

Tier 1 has the longest lockup of 189 days but receives a 2x or more on their provided assets. They also receive a share of $MAYA tokens. More details can be found in the whitepaper.

Risks for Tier 2 & 3:
If the Liquidity Auction is deemed disadvantageous for any reason (for example, there was too little liquidity raised) and the community decides to undo everything via Ragnarok, Tier 2 and 3 LPs might end up receiving back less than they originally deposited and effectively take a loss.

How to receive the $MAYA Airdrop

The team is paid with 78% of the $MAYA tokens, who will get the rest?
First of all, $RUNE holders. Maya is a friendly fork of THORChain and have no interest of sucking the capital or users.

They have designed guidelines reward $RUNE holders and liquidity providers. Straight from their docs:

$RUNE owners will get $MAYA tokens freely, simply by:

A. Having $RUNE bonded in a Node,

B. Having $RUNE locked in a symmetrical LP position,

C. Having a $RUNE asymmetrical LP position,

D. Holding $RUNE in a wallet and/or,

E. Holding $RUNE in Maya pools during the auction.

Cases A and B give a 4x boost. Cases C and D have a 2x boost. Case E has a 1x boost.

Note that asymmetric positions denominated in non-$RUNE don’t receive an airdrop since we can’t relate their Maya wallets to any Thor wallet.

What does it mean? Increase your $RUNE position and hold it on-chain, not on an exchange. Ideally, provide liquidity. Note that E.) holding $RUNE in the auction has the lowest factor. They really want you to keep your $RUNE.

How I will do it

I am currently providing liquidity on THORChain and holding some $RUNE on chain. This will grant me a share in the $MAYA airdrop. These $MAYA tokens generate a steady stream of $CACAO for eternity which grows with Maya Protocol growth. What’s not to love!

Additionally, I will provide some $ETH and maybe $RUNE (I might just hold it in Wallet for the 2x factor) for the liquidity auction and probably chose Tier 1 with the longest lockup. I receive extra $MAYA token and the biggest $CACAO allocation. Tier 2 & 3 can lose some funds if for some unforseen reason the auction is deemed unprofitable.

Participating in the liquidity auction means I will end up as a liquidity provider on Maya Protocol for $ETH & $RUNE, earning fees from the trading acitivity and “free” $CACAO tokens. They are not exactly free because of the volatility in the pool but I believe in their value going up in the future.

How about you? What do you think about Maya Protocol? Will you use this opportunity?

Let me know on Twitter or comment here!

If you liked this article, please consider clapping to help it reach more readers. You could also sign up for medium using my link (click here) — no extra cost but great support for my writing.

Big shoutout to Photon Miles for his awesome thread on Maya.

 

That’s it for today, thanks for reading!
n1ce

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n1ce
n1ce

I love to teach you Decentralized Finance on Fantom and THORChain Follow me on twitter: https://twitter.com/n1ce34007134


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