TLDR; an overview of the mechanics behind the Collective Zap-in, and details of the first ever Collective Zap-in with Liqwid Finance.
Liqwid Finance is a non-custodial liquidity market protocol built on Cardano. The protocol enables users to easily lend, borrow, and earn interest with their Cardano native assets while also earning ADA delegation rewards from liquid staking. Liqwid Finance recognises the benefit of having deep liquidity on Minswap, as well as being able to own a part of that liquidity. As such, Liqwid Finance will conduct a Collective Zap-in (CZI) for the $LQ Token starting on Tuesday, February 7th.
What is a Collective Zap-in (CZI)?
The Collective Zap-in is an initiative for projects like Liqwid Finance to increase their liquidity on Minswap and increase their Protocol Owned Liquidity (POL). CZI Participants can supply $ADA, and receive in exchange $ADA/$LQ Liquidity Pool tokens that can be staked for $MIN, $LQ and $ADA Farming rewards.
A more general overview of the CZI, its advantages and risks can be found in the following article. The key highlights of the Liqwid CZI are compiled below.
Key Highlights of the Liqwid Finance CZI
- Protocols such as Liqwid Finance can use Minswap’s CZI to acquire Protocol Owned Liquidity (POL) and grow their liquidity on Minswap.
- By supplying $ADA, participants are essentially Providing Liquidity for $ADA/$LQ at the market price the moment the CZI ends.
- Participants become Liquidity Providers of the $ADA/$LQ Pool and can farm their LP Tokens.
- Since the $ADA/$LQ Pair will be open to trading throughout the event, this means it will be up to the market to determine the ratio (price) at which the $ADA/$LQ Liquidity Pool Tokens are received. It also means CZI Participants will be subject to Impermanent Loss.
Timeline for the Liqwid Finance CZI
Twitter Spaces: on Monday, February 6th at 15.00 UTC / 10.00 EST Liqwid Finance and Minswap Labs will hold a Twitter Space to discuss the CZI.
2. Zap-in Phase — Liqwid CZI starts
The Zap-in Phase (7 days) will start Tuesday, February 7th at 10.00 EST / 3.00 UTC. Participants can supply $ADA to the CZI and will receive lqADA. This lqADA will not be redeemable until after the CZI has finished and can then be used to claim the resulting $ADA/$LQ LP Tokens.
3. Encounter Phase
The Encounter Phase will start Tuesday, February 14th at 10.00 EST / 3.00 UTC (provided not all the $LQ allocated has been used up by then).
Starting on February 14th, Participants will have to exchange their lqADA for $ADA/$LQ LP tokens. Those $ADA/$LQ LP tokens obtained from the CZI can be staked in the $ADA/$LQ Farming Pool to earn $LQ, $MIN and $ADA Farming rewards.
Liqwid Finance CZI Details
- A total of 630.000 $LQ, or 3% of total $LQ supply has been allocated towards the Minswap CZI. Please remember that depending on the $ADA supplied, the entire $LQ amount may not be fully used.
- A total of 210,000 $LQ, or 1% of total $LQ token supply has been allocated exclusively to the $ADA/$LQ Liquidity Provider incentives program on Minswap over a period of 6 months starting from the end of the CZI.
- 50% of the total LP Tokens generated during the event will be claimable by participants, in amounts proportional to the ADA they supplied to the CZI.
- The rest of $ADA/$LQ LP Tokens generated during the event (minus a Fee taken by the Minswap DAO) will become Protocol Owned Liquidity for the Liqwid Finance DAO.
- Once the CZI is over, $ADA/$LQ Liquidity Providers will be able to stake their LP Tokens to earn $LQ, $MIN and $ADA Farming rewards.
An Overview of the $LQ Token allocation can be found below:
- Core Team, Founders, Advisors: The tokens will be distributed over a linear 2 year vesting schedule which goes into effect starting at Liqwid v1 mainnet launch.
- User Distribution (incentives): will be distributed over 4 years. It will be split 50–50 between the suppliers and the borrowers.
- Liqwid investor disclosure: Liqwid Core Team completed a seed fundraising round in Q1 2022. The vesting period for the private investors is 2 years linear with a 4-month cliff starting at mainnet launch.
- Read more in the latest Tokenomics update from Liqwid.
To learn more about Liqwid Finance, visit the following links:
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