Liquidity Provision
Clipper has two unique structures for providing liquidity and collecting yield: Clipper Pools and Clipper Coves.
Clipper Pools are multi-asset liquidity pools composed of Core Assets. Pools are maintained at the ideal volume for small trades. Clipper Coves is an ecosystem of liquidity pools containing one Cove Asset and ClipperLP tokens, they enable the trading of any asset through Clipper.
Core Assets are cryptocurrencies that are offered natively through Clipper and make up Clipper’s current liquidity pools.
Cove Assets are any alt-coin or other crypto asset that you wish to trade on Polygon and Moonbeam using Clipper Coves.
ClipperLP tokens are identical to the CLPRDRPL tokens that liquidity providers receive in exchange for contributing to Clipper’s main liquidity pools. ClipperLP tokens are used exclusively as intermediary tokens for depositing and withdrawing from Clipper’s Liquidity Pools or Coves.
Clipper multi-asset pools composed of Core Assets and are maintained at the ideal size for small trades. Since liquidity is finite, Clipper prioritizes LPs who are users and community members with a few limitations:
Only Clipper community members that whitelist their wallet address can deposit liquidity. Whitelist registration is open to anyone.
By limiting the size of each deposit, we can ensure the pool doesn’t exceed the ideal size from only a few big LPs. Whitelisted LPs can see their deposit cap on Clipper by connecting their wallet.
Are you interested in providing higher amounts? With the launch of the Clipper Sponsor Program, liquidity providers can now deposit more (up to $100K) into Clipper's main liquidity pool to generate even more fees, while supporting Clipper’s future development as an AdmiralDAO contributor.
LP deposits are locked up for a mandatory period to ensure a stable and cost-effective trading experience on Clipper. LPs can view their lockup period by connecting their wallet on Clipper and viewing the pool.
Additionally, the trading fees you collect as an LP will be added to the overall value of your deposit and can be withdrawn at the same time as your initial stake.
Sponsors are not subject to mandatory lockup periods and can unlock and withdraw their deposit at any time. Learn more about Clipper's Sponsorship Program.
Clipper’s novel design expresses and awards yield differently than other DEXs.
The trading fees you collect as an LP will be added to the overall value of your deposit and can be withdrawn at the same time as your initial stake.
Since Clipper uses one multi-asset pool per network, LPs collect fees from every transaction made on the network, regardless of the asset you originally deposited.
Unlike some other liquidity programs, the real-time value of your deposit can fluctuate based on the prices of the entire liquidity pool rather than just the original asset you deposited. Clipper pools give you get exposure to a group of assets with varying risk levels. This minimizes your risk exposure.
Each time a liquidity provider contributes to a pool, they receive a certain amount of fungible pool tokens (“CLPRDRPL”). These ERC-20 tokens represent an LP’s fractional ownership of the underlying pool and enable Clipper’s protocols to normalize each LP’s deposits and withdrawal amounts in a way that ensures transparency and fairness for everyone. The utility of these tokens is only to measure the value of a deposit and are exchanged for tokens from the pool at the time of withdrawal.
To withdraw their liquidity deposits and accrued rewards, Clipper liquidity providers burn their CLPRDRPL pool tokens in exchange for crypto assets in the pool.
You can view Clipper LPs’ historical earnings using Clipper’s Data Dashboard, which displays fees earned by pool LPs over the past 24 hours and seven days. These figures are designed to be compatible with the fee reports from other DEXs (e.g., the Uniswap V3 info pages). Clipper's FMM architecture, which incorporates real-time offchain prices, limits the loss that LPs face from the changing mix of asset prices since the FMM architecture does not need arbitrageurs to set accurate prices. This kind of loss on exchanges that do not use price oracles is known as "impermanent loss", or "IL".
Clipper Coves is a new feature that offers low-fee trades between any token pairs via user-generated pools for coins on Polygon and Moonbeam. Clipper Coves allows you to use Clipper for all your trades while enjoying the best trading prices on the market. No matter which Cove you deposit to, you’ll get exposure to ClipperLP tokens and yield from every trade that goes through Clipper.
Clipper Coves is only supported on Moonbeam and Polygon right now.
- 1.Unlimited token swap options across Polygon and Moonbeam
- 2.Lower gas costs for nearly all Clipper trades
- 3.More flexibility for depositing and withdrawing assets
Clipper Coves is made up of separate user-generating liquidity pools, which are all composed of a single Cove Asset and ClipperLP tokens.
In addition to the above trading functions, Clipper users can also deposit to an existing Cove or activate their own Cove.
- 1.Select the Cove Asset you’d like to deposit.
- You cannot activate a Cove for a Core Asset.
- 2.When activating a Cove, deposit an equal amount of Cove Assets and Core Assets (in terms of dollar-denominated value).
- Clipper users must determine the exact balance of assets to deposit, since we do not have a way to directly measure the monetary value of your deposited Cove Assets.
- Adding unequal amounts of Cove and Core Assets puts you at risk of arbitrage and impermanent loss.
- 3.When depositing to an active Cove, ensure your deposit does not alter the current/last known price of the asset by more than 1%.
- Changing the asset's price by more than 1% puts you at risk of arbitrage and impermanent loss.
- 4.Receive a stake in ClipperLP tokens that matches the value of your assets at the time of your deposit.
- 1.Collect yields from swaps on Clipper, on top of yields generated each time the Cove Asset you added is involved in any swap.
- 2.Burn your ClipperLP tokens and withdraw liquidity whenever you want based on your Cove Asset’s current value.
The value of your deposit may fluctuate depending on your staked percentage of ClipperLP tokens and yield collected from Cove swaps on Clipper Swap, in addition to the market price exposure of your Cove Asset, Core Asset, and the ClipperLP token.
Clipper users can swap any asset using Clipper Coves!
Traders can execute cost-effective alt-coin to alt-coin swaps through Clipper Coves. These trades are automatically executed on the back end in a way that essentially uses the Clipper LP token as a low-fee bridge without actually interacting with the central Clipper exchange, which enables extremely low trading costs.
Traders can deposit Cove Assets (alt-coins) into a Cove to receive Clipper LP tokens in return. That means liquidity providers can turn their Cove assets into sweet Clipper yield and Core Asset exposure.
Traders can swap their ClipperLP tokens with any of Clipper’s five Core Assets and vice versa.
Traders can deposit a Core Asset into Clipper to receive Cove Assets from the corresponding Cove. This provides an attractive source of deposited capital for the central Clipper pool.
The yield from these “deposit swaps” goes to the alt-coin depositors.
Clipper users can also swap a Cove Asset for a Core Asset, but this type of trade involves two separate transactions and is not encouraged since it depletes Clipper’s main liquidity pools and is not as cost-effective as other types of Cove trades.
Last modified 6mo ago