In the first part, I gave a history of Curve Finance and “Curve Wars,” and in the middle part, I gave details of Liquid Lockers.
If you have not checked it out, please start with the first part for a better understanding.
In this last part, I will explain how to use Liquid Lockers.
How to use Liquid Lockers
1) Advance preparation: Buy tokens
First, purchase tokens at Stake DAO‘s DEX. Of course, you can also use an external DEX. It is best for your financial efficiency to use a DEX aggregator such as 1inch.
Recommended DEX aggregators are listed in this article.
Tokens to be purchased are SDT, any governance token, and tokens for which you wish to provide liquidity. Please choose the governance token for the protocol you wish to provide liquidity for. For example, if you want to provide 3pool (DAI+USDC+USDT) liquidity, the governance token to purchase is CRV since 3pool is a Curve LP token.
If you are new to crypto asset investing and are having trouble seeing the tokens you have purchased in your wallet, please use the wallet’s search function to find and add them, or add them from each token’s page on CoinMarketCap, for example.
2) Lock SDT
Locking SDT and receiving veSDT will have the following effects.
- Boost all the voting rights you get from each governance token
- Boost yields for all protocols supported by Liquid Lockers
- Earn the right to vote on Liquid Lockers’ governance ballot
- Earn +10% APY from all lockers and strategies
- Earn 5% of fees paid by users to Stake DAO
Once the tokens have been purchased, the next step is to lock the SDT with Liquid Lockers.
You can execute the lock from “Boost your yield and power” on the top page.
The amount of SDT to be locked is set in “Amount” and the date when the lock will be released is set in “Duration”. The larger the amount and the longer the duration, the stronger the incentive to lock SDT.
“Approve” must be done before the lock can be executed. Approval requires a gas fee.
Once you have executed “Create Lock” you are done to lock the SDT. You will automatically receive veSDT.
To increase the lock amount, enter the additional amount on the Lock tab and execute “Increase lock amount”; to extend the lock duration, set the date on the Increase duration tab and execute “Increase Lock Duration”.
3) Stake sdToken
Lock any governance token, receive sdXXX (sdToken), and further stake it to obtain sdXXX-guage, which has the following effects in the corresponding protocol.
- Earn the right to vote
- Earn boosted APR
- Earn the right to sell unused voting rights
- Earn 8% of commissions as locker & strategy rewards
Then lock any governance token and stake the sdToken received.
This can also be done from “Convert your governance token” on the top page.
After “Approve” as in SDT, enter the lock amount and execute “Mint & Stake”.
Here is an example of a CRV.
In the image, the “STAKE” setting is “Off,” but setting it to “On” enables simultaneous locking and staking. Also, turning “GAS OPTIMIZED” to “On” will save on gas costs. “USE SDVECRV” is a function for veCurveVault users to use sdveCRV instead of CRV.
You can choose to “Mint” or “Buy,” but I suggest you choose the higher amount of sdCRV you receive.
Once the stake is completed, the sdCRV-gauge is automatically earned.
Unstaking can be performed at the “Go to advanced page” link.
To convert sdCRV back to CRV, perform the exchange in Curve Finance‘s Pool.
You can jump directly to Curve from the link on the Liquid Lockers top page.
4) Stake LP tokens
Lock SDT to earn veSDT and then lock governance token & stake sdToken to earn sdxxx-guage. Staking LP tokens in this state will maximize the yield boost in the liquidity offering.
After acquiring & staking the sdToken for any protocol, the next step is to provide liquidity.
You can stake LP tokens from “Stake protocol’s LP tokens” on the top page.
There are two ways to stake LP tokens. Take sdCRV/CRV for example: “Get sdCRVCRV-f” and “Zap CRV”. Most of the time “Get” is used, but some LPs can “Zap”.
Procedure for “Get”
When using “Get sdCRVCRV-f”, first obtain an LP token from CRV and sdCRV.
Unlike PancakeSwap, etc., it is not necessary to deposit the equivalent value ratio.
When “DEPOSIT SINGLE ASSET” is “On”, you can get LP tokens by depositing only CRV (governance tokens). In this case, half of the deposited CRV will be used for minting sdCRV. For example, when you enter 1 CRV and perform a deposit, the amount of LP tokens you will earn is “1 sdCRVCRV-f” (0.5 sdCRV + 0.5 CRV). *Excluding the cost of gas
Once the LP token has been acquired, next to stake it.
Once you have entered the amount of LP tokens you wish to stake and executed “Deposit & stake”, the liquidity offering is complete.
To remove the liquidity provision, withdraw the sdCRV on the Withdraw tab.
Procedure for “Zap”
When doing a “Zap CRV,” liquidity provision is completed simply by making a CRV deposit.
Staking begins immediately upon deposit, so there is no need for manual staking.
In the Zap CRV, half of every CRV deposited goes to the sdCRV mint.
The procedure for releasing the liquidity provision is the same as for “Get”, withdraw the sdCRV on the “Withdraw” tab.
5) Claim rewards
Earned rewards can be claimed on the Claim tab.
The display is divided into locker rewards, strategy rewards, veSDT rewards, and bribe rewards/air drops.
If “Extra actions” under “Claim lockers & strategies rewards” is set to “On,” SDTs received as rewards can be locked as they are, and various governance tokens can be staked to Liquid Lockers.
6) Governance Voting
You can participate in governance voting from the Vote tab.
There are the following types of voting.
- Lockers Allocation / Vote on the allocation of compensation for each protocol
- Strategies Allocation / Vote on allocation of compensation from liquidity provision
- New gauge votes / Vote on proposal to add new gauge
- SDT Governance / Vote for the proposal on Stake DAO (no gas required)
- Meta-governance / Vote on proposals for each protocol (no gas required)
Voting does not consume veSDT. To vote again for the same gauge (change the Vote weight percentage) in the reward allocation poll, you must wait 10 days after voting.
The veSDT you hold will be used separately for each ballot. Using 100% of your votes in one ballot does not disqualify you from participating in another ballot. You can use your 100% voting rights for another ballot in the same way.
Under “New gauge votes,” you can create a new vote if you have at least 2,500 veSDT.
Every strategy (liquidity) and locker (governance token vault) on the Liquid Lockers platform can have its own gauge. veSDT holders can vote for each gauge from Lockers Allocation and Strategies Allocation. This means that as gauges are created, users will be able to increase their rewards and boost their APY.
DAO management tasks
Harvest, Earn, etc., and be rewarded for participating in the operation of the DAO. This feature is intended to facilitate the decentralization of DAOs and minimize off-chain manual or automated operations.
Since gas costs often exceed revenues, please be cautions when using this service.
Boost calculator is a boost rate calculator. By using this tool, users can know exactly how much veSDT is needed to boost sdToken’s voting power and rewards to the maximum (2.5x).
This is a graph from the “Calculator” tab.
The graphs in the “Spider graph” tab.
Liquid Lockers integrates the “Portfolio Insurance” SDK of the DeFi insurance protocol Solace. Just purchase one insurance (Policy) with Solace and your positions in over 220 DeFi protocols are guaranteed.
The guarantee covers technical risks, smart contract exploits (attacks that take advantage of vulnerabilities) and hacking. These include Minting vulnerabilities, Flash loan attack, Trojan fake tokens, Proxy manipulation, Math error, and Re-entry attacs. For more information, please see Solace’s Terms & Conditions.
Insurance can be purchased through the “Purchase Policy” in the upper right corner of the screen.
Payment is USDC. Approve use with “Approve”.
Then, set the coverage limits and purchase insurance.
Once purchased, all assets held with Liquid Lockers are insured.
Your current insurance status will be displayed under “My current coverage policy”.
Deactivating a policy is done from “Deactivate policy” in the upper right corner of the screen, and withdrawing assets is done from “Withdraw funds”. You can change the cover limit from the gear symbol under “Cover limit”.
Gas will be charged for all operations up to this point. Please be aware of this when using your insurance.
This option allows any Curve pool where a gauge exists to be added on the Factory screen.
Adding a pool allows for boosting by CRV and SDT.
On the Bribes screen, you can see the gauges where bribes are currently being distributed. When you vote for the bribe recipients shown here, you will receive a bribe for each of the reward amounts. Bribes are distributed bi-weekly.
If you delegate voting for each protocol to Stake DAO (stakedao-lockers.eth) with “Delegate your voting power”, it will automatically acquire the most appropriate bribe depending on the sdToken held by the user.
Once you delegate your vote, Stake DAO will continue to work until you unset it. During that time, manual voting will be disabled. If you wish to vote on your own, you can un-delegate. Undelegation can be performed at any time.
That’s all I have to say about how to use it. Thank you for your hard work~.
I would like to thank aesop@aesopfloppy (co-founder of rekt, member of Stake DAO) for giving me the opportunity to talk about this today and for taking the time to answer my questions as a layman.
I am not sure if there is any marketing effect to this article, but I had a great time learning about the possibilities and attractions that Liquid Lockers has opened up. I also gained a deeper understanding of DeFi.
For those of you who have been listening, let me give you a brief background, I received a direct message from aesop-san asking if I would like to do a feature on Liquid Lockers. It was an unexpected contact. I was very surprised because I check rekt every time there is an incident and I had known about Stake DAO for a long time and was interested in it.
So I looked into Stake DAO’s flagship product, Liquid Lockers, and found it to be an amazing, or rather outstanding, product, and that’s roughly how I came to write this article.
Just to be clear, I have not received any legal tender or crypto assets (I want them), so I am not promoting Stake DAO or Liquid Lockers. I felt it was a really good one, so I introduced it to you.
The point that particularly struck me was the relationship that Liquid Lockers was born from a product involving Mr. Julien Bouteloup, a core team member at Curve Finance. It’s very interesting. I think many people can relate to products like Liquid Lockers, which cannot be invented without a constant awareness of the problem.
The relationship between the veToken model, originated by Curve Finance and yield aggregators such as Convex and Stake DAO, which I told today, is very complicated. And you can’t understand the product without knowing its history, and even if you wanted to use it, you still wouldn’t know how to use it. I honestly don’t think there is anyone who can understand it all at once just by listening to what I have to say today. (Furthermore, there are no Japanese-language materials available for the main points I discussed today…)
But on the other hand, it also means that there is still a lot of room for individual investors to make money in Liquid Lockers. I encourage you to give it a try.
Perhaps some of you are concerned about regulations for DeFi. Finally, I would like to post aesop-san’s reply to my question regarding the regulation in its original form.
Q: Many people who are new to Stake DAO may be concerned about regulations. Regulations for DeFi are becoming stricter, do you have any measures to develop your business in the future?
A: Stake DAO is not a US based protocol, we are a decentralised platform, and although we are aware of the increasing regulatory stress that is being placed on DeFi in general, we are confident that we are doing what’s required to stay within all current guidelines.
This article is not financial advice. Please do some research on your own. Please take a moment to check it out for yourself.
See you then. Thank you so much for your time up until the end!