Sirwin
Sirwin

Across The Cryptoverse #29 - Supplying ACX Liquidity On Velodrome

By PVM | SuperUMAns | 5 Nov 2023


Across is the bridge that Ethereum deserves, being fast and financially efficient, the best option in the hyper-competitive cross-chain landscape! In just one month of Base bridging, Across captured approximately 25% of the off-Base flows on a daily basis.

Onwards and upwards! Across LP on Velodrome become active, the zkSummer campaign success and the Metamask integration for a better bridging experience on MetaMask Portfolio. This were few of the recent Across achievements and milestones! 

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I waited for Across LPs on Velodrome, and dived in immediately after launch. Velodrome Finance is a next-generation AMM that combines the best of Curve, Convex and Uniswap, designed to serve as Optimism's central liquidity hub. Velodrome uses locked $VELO NFTs to vote on token emissions and receive incentives and fees generated by the protocol.

Being early as a liquidity provider is one of the main advantages, as the APY is always bigger with less players in the pool. I paired 11,500 ACX with 0.35 ETH to create my liquidity, and got ready for top yield rewards. 

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I had some issues with the confirmation, as the mobile version didn't let me stake the full amount. Went round it by staking 99% of the LP, and repeating the process three times. I staked 99.99% of the v-AMMMV2-WETH/ACX LP and started farming $VELO.

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The early bird catches the worm! Being early brings extra benefits, and the emissions APR at 778% is the proof! It was close to 1000% when I staked in, but it dropped a little with every new provider. 

I came back exactly 24 hours later, ready to harvest. The emissions APR maintained above 100% for a long time after this, and I delayed farming the rewards for few more days. 

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The key problem with most AMMs was that the emission rate is often tied to liquidity, rather than to trading volume. Velodrome allows holders of their native token, VELO, to lock them for a selected duration between 1 week to 4 years and solve the issue.   Any VELO holder can lock their tokens to convert to veVELO, and this was the path that I choose! The longer the lock, the more veVELO the user receives, which grants them more voting power. Was time to claim 136.67 $VELO and convert them into veVELO and voting power.

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The system is simple and efficient! The user locks $VELO for voting power, and can to use  it to direct liquidity emissions to specific pools. Liquidity emissions from Velodrome are distributed proportionally based on votes received by each pool, and in return the voters receive 100% of all fees and bribes received by the specific pools that they voted for.

Bribes flow to voters which incentivizes them to vote for the pools with the highest combined value of bribes and fees. I decided to play the long term game and locked all the $VELO for four years, receiving the maximum amount of voting power.

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The position in locked VELO will be represented as veVELO, a non-fungible token which can then be traded on NFT marketplaces. Rebasing is used to ensure that VELO lockers were not significantly diluted, where veVELO is distributed to VELO lockers, proportionate to their locked amount.

Lock ID 17364 was created, and I started voting for higher emissions in the ACX-ETH pool. The Rebase APR was 11.47%, adding VELO with each rebase, and my vote will help me earn more from my LP. It's interesting that you can claim and lock the rebased $VELO into the same lock. The journey on Velodrome just started.... on your bike son! 

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PVM
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UMA Ambassador 🐔 Across Committee Member 🌉 Horizen Ambassador


SuperUMAns
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