Symblox Strategy Guide for Dummies
Before we start the guide, we would like to quickly mention the current status of Symblox.
At the time of publishing (within the first 48 hours after launch), Symblox contract is the 5th largest holder of VLX.
The total amount of VLX transferred to Symblox’s contract is over 171m VLX.
If you’re a little perplexed about DeFi mining with Symblox, you need not worry! Here is an easy-to-understand guide to help you through the process.
There are two reward pools. 20% of all rewards will be allocated to the Seed Pool, and 80% into the Swap Pool.
The purpose of the Seed Pool is for users who don’t have any SYX and wish to stake VLX while having the ability to take out that sum at any time without risk of losing any VLX. Just stake your VLX and earn SYX as rewards.
Disclaimer: There are some risk when staking in the Swap Pool.
20% of all rewards goes to the Seed Pool and 80% will be allocated to the Swap Pool. This gives Liquidity Providers (LP) more rewards for adding liquidity to the Swap Pool as opposed to staking in the Seed Pool. You can add your VLX and/or SYX into the Swap Pool. When you stake VLX into the Swap Pool, you are effectively contributing your assets to the total value of the Swap Pool. The Swap Pool is the Total Value Locked (TLV) of all the VLX and SYX combined, so you will need to calculate to see what the value is for your stake. You will need to observe the price for the two assets because your stake will fluctuate. When you stake in the Swap Pool, it will be allocated into the pool and you will hold a percentage of the share in the pool.
There are two swapping assets (VLX/SYX). When VLX liquidity is added into the pool or when SYX liquidity is removed, the SYX price will increase. Conversely, when VLX liquidity is removed or SYX is staked, the SYX price will decrease. Therefore when a user injects liquidity into the Swap Pool, he must be aware that what he puts in will directly change the price of the corresponding asset. This will come into play with price slippage. The general rule of thumb is to not to inject a massive amount at one time and is generally better to limit the price slippage to be less than 1%.
Adding and removing liquidity
For example, the swap consists of 80% VLX and 20% SYX. The Total Locked Value (TLV) of the pool is 1,000,000 VLX (800k in VLX and 200,000 VLX worth of SYX.)
User A stakes 100,000 VLX so he effectively holds 9.09% after fully diluted (100k / 1.1M).
Now, there’s 1,118,182, which is 900,000 VLX + 218,182 VLX worth of SYX (200K went up by 9.09%) in the pool
If User B staked another 100,000 VLX, he now owns 8.21% of the pool (100K / (100K + 1,118,182)). Now, the VLX side of pool becomes 1,000,000 VLX, (900K + 100K VLX from User B); And SYX side increases from 218,182 to 236,092 VLX worth, which is 218,182 x (1 + 8.21%) because SYX price increases by 8.21% too
Now, the Total Value Locked in the pool is 1,236,092, which is 1M VLX + 236,092 VLX worth of SYX
After User B’s deposited, User A’s shares are diluted from 9.09% to 8.34% (9.09% x (1–8.21%))
Now when User A withdraws all his liquidity, he will get 8.34% of 1M VLX, which is 83,446 VLX
And for his SYX shares, because of VLX liquidity decreasing, SYX price decreases at the same rate of 8.34%, so SYX value goes down to 216,391 VLX ( 236,092 x (1–8.34%).
So from SYX side, he gets 18,057 VLX (216,391 x 8.34%)
In total, User A will get 101,503 VLX, which is 83,446 VLX from VLX side and 18,057 VLX from SYX side of the pool
User A profited 1,503 VLX in this transaction.
It is important to look at your share of the Swap Pool. They are displayed here:
You may check the aggregated value of your assets in the Swap Pool by clicking on “Add Liquidity”. You can choose to view it in both denominations of VLX as well as SYX, highlighted in the following picture:
To take your SYX rewards, click on “Claim Now”.
To remove liquidity entirely, click on “Remove Liquidity” in the same tab.