Automated 1-click liquidity formation
Say you have ETH and want a position in the Balancer RDNT-ETH pool. Well, it’s a painful process to get into that position.
First, you must supply RDNT & ETH in the appropriate proportions, which takes four transactions.
Zapping allows you to do it in one click.
There are many areas on the platform to zap into dLP, but for the purposes of this tutorial, we will choose to zap from the Markets page.
As seen in the image below, you need to have ETH in your wallet or borrow ETH against your collateral from the money market in order to Zap.
- 1.Choose the source you are zapping with- Radiant allows you to zap with ETH/BNB in your wallet or to borrow directly from the money market if you have deposited collateral. Please consider your health factor and risk of liquidation before borrowing. Zapping will never reduce your health factor below 1.1
- 2.Select your desired input amount. Note that you can assess the amount of dLP required to zap and lock to be eligible for RDNT emissions in the money market.
- 3.Select your Zap duration. The longer you lock, the higher the multiplier for your share of platform fees.
Let's review how the locking APR is calculated for a locking duration of 1 month:
Example: 1 month locking APR: - Definition: Current locking APR for 1 month - Calculation: (Total 1 Month Lockers’ Share of Annualized Protocol Fees) / (Total 1 Month Lockers’ Share of dLP Pool Size) 1 Month Locker Share of Protocol Fees: -Calculation: (1 Month Locker Share of Protocol Power / Total Protocol Locking Power) Total Protocol Locking Power: - Calculation: (1 Month Lockers Share of dLP Pool Size * 1 Month Locker Multiplier (currently 1x)) + (3 Month Lockers’ Share of dLP Pool Size * 3 Month Locker Multipler (currently 4x)) + (6 month Lockers’ Share of dLP Pool Size * 6 month Lockers’ Multiplier (currently 10x)) + (12 month Lockers Share of dLP Pool Size * 12 Month Locker Multipler)) = Total Protocol Locking Power Your New Annual Rewards: - Definition: User projected annual rewards, in USD terms, based on both RDNT rewards and Protocol fees: -Calculation: (Projected user daily RDNT rewards * 365) + (Projected user daily protocol fees * 365)
On this final step, a user can confirm their final zapping details. In the example shown, 21 ETH is being used from their wallet to zap into dLP. Our locking length is also displayed here.
Once the transaction is complete, you'll be a part of the liquidity pool and begin receiving platform fees!
Reminder, that zapping into dLP will lock your LP tokens for the specified time period (one to twelve months), and can be unlocked after that time period has elapsed. You may view your lock expirations from the Manage Radiant page.
To manage slippage, click the little icon at the top right. Next, input your slippage tolerance and the maximum percentage you're willing to lose. Once you set your max tolerance for slippage, you're protected up to that amount. When you hit “Confirm” to execute a Zap, you will get an error telling you to reload the page or increase your slippage tolerance.
keep in mind that providing liquidity carries some risk, as the value of your LPs may fluctuate as well as impermanent loss.
Balancer explains the reduced impermanent loss in their Medium article, which applies to Radiant's dLP on Arbitrum.