TomoChain CheatSheet #6 - Farming on LuaSwap (Pt.2)

LuaSwap offers many functions, each with a separate feature for LUA users to take advantage of.

Swap: Swap tokens among different chains

Luawap permits users to swap between ETH & other ERC-20 tokens on Ethereum; between TOMO & other TRC-21 tokens on TomoChain. LuaSwap enables users to exchange in a decentralized manner without the need for KYC or any middle party. Once you initiate a transaction, it immediately takes the desired token amount out of your wallet and puts the same amount back in another format.

Follow our instructions to know how to swap tokens on LuaSwap.

Pool: deposit tokens into liquidity pools to get rewards

Users can create a new pair of tokens and add/remove liquidity from token pools with the Pool function on LuaSwap. Creating a liquidity pool is similar to creating your own exchange, enabling you to control your tokens while adding liquidity into different pools and earn rewards on your asset holdings. Click “Pool” under the Product drop down menu on the LuaSwap homepage, then follow our step-by-step guide to explore the pools.

Liquidity providers earn a 0.35% fee on all trades proportional to their share of the pool. Fees are added to the pool, accrue in real time and can be claimed by withdrawing your liquidity.

Link embedded video: How to add/remove liquidity on LuaSwap - YouTube

LuaSafe introduction

LuaSafe is LuaSwap’s LUA-specific staking pool, where LUA holders can stake LUA to earn passive income.

LuaSafe income is generated through a portion of fees collected and distributed in the following way:

  • 0.05% from swap fees across all pairs
  • 0.1% from withdrawal fees for LPs withdrawing liquidity from liquidity pools.
  • 0.5% from users withdrawing their LUA staked in LuaSafe

Users who stake LUA in LuaSafe will receive xLUA LP tokens which represent their proportion of LUA staked. xLUA LP tokens will collect all income generated by LuaSafe. Stakers will need to withdraw their xLUA LP tokens in order to receive their original LUA staked plus all LUA income earned through the fees collected in the LuaSafe staking pool. There is a flat fee of 0.5% levied for all withdrawals. Withdrawals can be done at any time.

The “CONVERT” button on LuaSafe will trigger reward distribution for the selected pair by calling 2 functions directly to the smart contract LuaMaker, which will perform the following:

(1) Burn collected LP tokens from withdrawal fees and swap fees

(2) Buy LUA at market price and send it into the LuaSafe contract.

The core team will trigger distribution every Monday, generally around noon Singapore time (GMT+8) or earlier if the pair’s collected fee reaches a certain significant amount (equivalent to at least 3,000 LUA after conversion). Users do not need to pay any gas fee for the distribution unless they choose to manually trigger the distribution process themselves.

Farm: Stake LP tokens across a variety of pools to earn LUA

To do that, you have to become a liquidity provider. The Farming function of LuaSwap allows you to stake your LP tokens across a variety of pools to earn LUA, making more profit with your crypto assets. In exchange for staking your assets in the liquidity pool, you will receive a percentage of tokens that represent your share, which is called LUA-V1 LP tokens.

Link embedded video: How to Stake/Unstake your LP Token on LuaSwap - YouTube

Chart function on Ethereum/TomoChain

The Chart function provides an all-in-one analytics dashboard with in-depth insights for liquidity providers and yield farmers. Whether it is on the Ethereum or TomoChain network, users will find great insights about the protocol like Volume & Fees, Liquidity provided, and Top Traded Pairs, along with 20+ analytics for each traded pair on LuaSwap.

Governance: the function to use LUA on LuaSwap’s ecosystem.

LuaSwap is ultimately governed by its community. The Governance function gives LUA holders the voting power to influence LuaSwap’s direction via LuaSwap Snapshot, using LUA or xLUA. For instance, community members can open and vote on a proposal for a new change or suggestion on the reward system within LuaSwap…

Fee structure

1/ Swapping fee

The swap fee is set at 0.4%, of which 0.05% goes to LuaSafe stakers (more on LuaSafe below), and the remaining 0.35% goes to LPs.

2/ Withdrawal fee for liquidity provider

A withdrawal fee of 0.1% is applied when an LP chooses to remove liquidity and exit. This fee is used to encourage long-term LPs and to create a healthier liquidity environment for LuaSwap users.

3/ Withdrawal fee for staker on LuaSafe

There is a flat fee of 0.5% levied for all withdrawals from LuaSafe. Withdrawals can be done at any time.

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In summary, LuaSwap is among the most innovative multichain AMA, which enhances users’ trading experience & facilitates convenience and ease of actions. We hope that through this article, you can get key & accurate insights about LuaSwap.