How to start LPing & farming on Mori Protocol
Mori Protocol is an all-in-one DEX natively built on the Viction blockchain. It provides users with superior capital efficiency and trading experience. It recently launched its mainnet beta and started its liquidity farming program. Users can grab the opportunity to earn the initial farming rewards in addition to the organic trading fee revenue and enjoy lucrative APR.
Here is a tutorial of how to provide liquidity on Mori Protocol and participate in the liquidity farming:
Tutorial
1. Access https://app.moriprotocol.io and connect your wallet to start.
2. Navigate to the “Pools” page from the top menu. Those pools with “Farming” label are currently allocated with farming rewards. You can choose a pool that you are interested in and click the “+” button next to it to enter its liquidity adding page.
3. Taking CUSD-USDV pool as an example, when you provide liquidity with a new position, the first thing you need to do is to set a price range for your position because Mori is a concentrated liquidity based DEX. Your liquidity will be active only when the current pool price lies in the price range you set.
4. After setting your price range, you can enter the amount you would like to deposit. By entering the amount of one of the tokens, the amount of the other one will be calculated automatically based on the current price and your price range.
5. For assets you interact with via the protocol for the first time, it will ask you to approve the asset on your wallet first before processing the liquidity adding.
6. After approving all new assets, you can click “Add Liquidity” to continue. You can double check and confirm your liquidity details in the pop-up window and then approve the transaction in your wallet to complete the request.
7. Now, you’ve added liquidity and got your liquidity position. Next thing is to join the farming. You can click the “Farms” tag on the navigation bar to enter the Farms page.
8. Find the pool that you already had liquidity in, click the “Drop Down” icon next to the pool to check your positions available to stake.
9. Choose the liquidity position you want to stake to the farm, click the “Stake” button to proceed. Approve the transaction in your wallet to complete it.
Understanding Mori Farming
As Mori Protocol is based on CLMM model (Uniswap V3 model), the liquidity farming on Mori will be a little different from common AMMs.
Because LPs on Mori can customize their price ranges when they provide liquidity, positions within different price ranges may have different effectiveness under dynamic market situations, even if they contain same amounts of TVL. Just imagine a user provides his/her liquidity into an inactive or even completely unreasonable price range. It makes no sense if he/she could earn the same as others who are managing their liquidity actively. Therefore, it is not reasonable to distribute farming incentives purely based on LPs’ TVL amounts on Mori.
Based on CLMM algorithm charateristics, Mori evaluates its farming incentive distribution based on the real-time liquidity efficiency of each liquidity position instead of its TVL. This can be indicated by the trading fee earning performance of each position. The liquidity efficiency of a position is directly proportional to the trading fees generated by the position per unit time. The more liquidity fees a position earns within a period, the more trading volume it handles, which means it has made a bigger contribution to the protocol.
Positions with a narrower range containing the current price will usually have much higher liquidity efficiency, but narrow-range positions are more likely to go out of range during high price fluctuations. LPs who go with such aggressive strategies may enjoy higher efficiency in earning fees and farming rewards, but at the same time they also need to conduct more frequent rebalancing operations and bear relatively higher impermanent loss risk when the price experiences significant change. It is suggested to select a reasonable price range upon personal expertise to balance between the liquidity efficiency and management difficulty.
Mori Protocol
All-in-one DEX natively built on Viction
Website: https://app.moriprotocol.io/
Twitter: https://twitter.com/moriprotocol
Discord: https://discord.gg/f2FAYjPFSZ
