How to Earn Up to 50% APR as a Liquidity Provider — With No Impermanent Loss

xSigma Lab
3 min readJun 11, 2021

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Impermanent loss (IL) is the scourge of liquidity providers. LPs who lock their tokens into pools on AMMs and DEXs earn a share of the trading fees, but these rewards can come at a high cost. Due to the inherent volatility of crypto assets, movement in the respective price of token pairs can erase those gains and frequently lead to dollar losses.

xSigma DEX was designed to give liquidity providers, who are the backbone of decentralized finance, a safer way to earn rewards while providing a vital service. By pooling any combination of the three leading stablecoins, DAI, USDT, and USDC, LPs can make their assets work for them while collecting annual rewards of up to 50% the value of their principal. You’ll struggle to find a better deal or a safer way to grow your wealth in the entire defi ecosystem.

Less Losses, More Profits

If you’ve ever LP’d tokens on an AMM such as Uniswap, you’ll know first-hand the perils of impermanent loss. Through the defi summer of 2020, many self-described degens aped into pools 1 and 2 on yield farms, only to discover that the food coins they’d farmed were worth far less than the losses they’d incurred due to their fellow farmers dumping the native token into the liquidity pool to cash out profits.

Yield farming the native token in a pool paying out four-digit APRs is an extreme example, but even when LP’ing comparatively stable assets, say ETH/LINK, impermanent loss can rear its ugly head. That’s why, when we set about designing xSigma DEX, our goal was to put an end to this problem once and for all, creating greater incentives for LPs to stick around and provide the liquidity that traders need to enter and exit positions.

In xSigma, we’ve created an AMM for stablecoin swaps that not only protects liquidity providers, but incentivizes them in the form of SIG rewards, over and above the trading fees they will ultimately receive.

Why You Should Take Your Stables to xSigma

Smart DeFi traders appreciate the benefit of holding a portion of their portfolio in stablecoins as a hedge against market volatility or, heaven forbid, a prolonged bear market. After all, nothing goes up forever, and it makes sense to deploy a tranche of your capital to stables, be it to BTFD when the market drops, or to provide a steady revenue stream that won’t have you sweating crypto price moves.

If you’re seeking a profitable place to park your stablecoins to earn consistent yield, take a closer look at xSigma DEX. When deciding the best place to obtain a return on your assets, safety is paramount, particularly when using stablecoins. In this context, APR — while still important — is unlikely to be your primary concern; you’re more inclined to want to safeguard your assets at all cost. That’s why xSigma DEX ticks all the right boxes for safe stablecoin LP’ing:

  • Next generation stablecoin exchange developed by NASDAQ-backed company
  • Processed more than half a billion dollars for LPs inside our rigorously tested code
  • Recorded over $400M of trading volume since launch
  • Staking in pool 1 provides two benefits:
  • Donate fee drop (read more on this later)
  • 20% APR without IL risk

And with gas prices having settled down on Ethereum, there’s never been a better time to pool. What’s more, with expansion to Binance Smart Chain in the works, the xSigma ecosystem is growing rapidly, providing even more opportunities to earn.

So there you have it: the rational case for placing your stablecoins in xSigma and letting your crypto assets work for you. More rewards, greater stability, and you can bid goodbye to impermanent loss once and for all.

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