The NFT staking feature was recently released and it's time to analyze possible strategies for utilizing this new option within the MetalSwap dApp.

This feature allows users who provide liquidity in Uniswap V3 in the XMT/USDC pair to take their NFT that represents the deposited liquidity and stake it within the dApp, earning extra rewards such as 500 OP and 5000 XMT tokens.

In today's article, we present a liquidity providing strategy that we have named "soft" because it involves setting a fairly wide range.

How to deposit liquidity on UniSwap V3?

In the official article about the NFT staking feature we already provide a step-by-step guide for depositing the liquidity directly from the dApp and for a better understanding, you can also check the dedicated docs.

In this article, we will propose a 50/50 strategy on the XMT/USDC pair, which means you will need to own the same dollar value for both tokens in the pair. Let’s pretend we have $500 of XMT and $500 of USDC for a total value of $1000.

The wide range strategy: Pros and Cons

The most difficult and strategic choice to make in creating the liquidity pair is obviously the choice of the price range to select within which the liquidity will work and earn rewards.

On Uniswap V3, in fact, you can decide the price range within which to concentrate the liquidity. The tighter the range, the greater the concentration of the pool and thus the rewards that the liquidity will manage to collect.

However, the tighter the range, the greater the risk that the price will move out of that range and that the user will no longer be able to earn anything from their position until they create a new position around the new market price.

The strategy presented today aims to be quite conservative and use fairly wide price ranges, which will definitely involve less active management, but obviously at the expense of rewards, which will be lower compared to more concentrated liquidity.

For those who still prefer tight ranges and very high returns, we have already released a more aggressive strategy just last week.

In this case, we select a symmetrical range around the current price of XMT, which builds at -30% and +30% from the current price of 0.01422$.

Price range selection on MetalSwap dApp

This strategy will therefore be active as long as the price of XMT remains within the range of 0.0099$ to a maximum of 0.0184$. Once the range is selected, we simply deposit the 500$ of XMT, equivalent to 35150 XMT, and the 500$ of USDC, and we create the position.

Take advantage of this opportunity

This is a great opportunity, both to earn excellent rewards and to actively help the growth of the project, as deeper liquidity pairs bring a general benefit to the project and especially to the token.

Again, the greater the concentration of liquidity, the greater the rewards within the MetalSwap dApp. 

Every week, 10% of the rewards present within the rewards pool will be distributed. This means that in the first week, 50 OP (which is 10% of 500) and 500 XMT (which is 10% of 5000) will be distributed.

During the second week, 10% of the remaining 450 OP and 4500 XMT will be distributed, 

To make the most of this opportunity and earn the maximum rewards, it is important to participate in staking as soon as possible.

-The DeFi Foundation

✎ What is MetalSwap?

MetalSwap is a decentralized platform that allows Hedging Contract on financial markets with the aim of providing coverage to those who work with Digital Asset and an investment opportunity for those who contribute to increase the shared liquidity of the project. Allowing the protection for an increasing number of operators.
With Hedging Contract we enable hedge swap transactions through the use of Smart Contracts, AMM style.

It's great to Hedge the Risk of Price volatility with MetalSwap dApp !