SODAX Pool allows users to supply assets as liquidity to targeted liquidity pools within the SODAX ecosystem. In return, liquidity providers (LPs) may receive rewards for their contribution to the system's effective liquidity.
SODAX Pool uses concentrated liquidity, which means providers choose a price range over which their assets are active. This allows for more efficient use of capital compared to traditional liquidity pool models. For more on how this works, see "Why do I need to select a range for my liquidity?"
How SODAX Pool Works
When you provide liquidity to SODAX Pool, your assets join a unified pool within the SODAX Hub. This pool is used to facilitate SODA trades and process unstaking requests across the system.
💡 We recommend taking a wide range when initially using SODAX Pool. If trading price goes out of your range then your liquidity will become inactive, get used to the experience on wider ranges first.
Concentrated Liquidity: Rather than spreading your assets evenly across all possible prices, you select a specific price range where your liquidity will be active. Tighter ranges can earn higher rewards but require more active management.
50/50 Supply: To provide liquidity to the SODA/xSODA pool, you need to supply both assets in equal value, split 50/50 by SODA value.
Rewards: Liquidity providers earn rewards based on their contribution to the pool. The closer and tighter your range is to the active trading price, the more your liquidity is utilized, but the more active management the position will require.
Initial Rewards Phase
During the initial phase of SODAX Pool, rewards are funded from legacy liquidity incentive funds that have been migrated from the ICON Network. The team is targeting an estimated APR for liquidity providers of roughly 5-15%, and will distribute the migrated funds accordingly.
As this initial fund is distributed and effective liquidity grows, the reward basis will be reviewed to determine if additional stimulus is needed to sustain this APR longer term.
🔍 Rewards are not guaranteed. The target APR of 5-15% is an estimate based on current internal goals. Actual rewards will also depend on pool activity, your selected price range, utility, and the amount of liquidity provided.
Getting Started
To begin providing liquidity, navigate to SODAX Pool, connect your wallet, and supply SODA and xSODA to the pool. You will need both assets in your wallet before you can provide liquidity. If you do not yet have xSODA, you can follow our step-by-step walkthrough of “How do I stake SODAX on SODA Stake?”.
For a step-by-step walkthrough, see "How do I provide SODA liquidity on SODAX Pool?"
⚠️ Security Reminder: Always ensure you are on the official www.sodax.com domain before connecting your wallet or authorizing transactions.
Need Help?
If you have any further questions about providing liquidity or need assistance, visit our Support Center for more articles and resources, or contact our support team via the button in the bottom right.