Welcome to the simple guide to getting your AVAX or JEWEL to DFK chain and provide liquidity on Crystalvale. Depending on which network you are on, here are the instructions. You need to go to: https://game.defikingdoms.com/.
Transferring Your Assets
Swap your AVAX to JEWEL and bridge them to the DFK chain. If you are confused, have a look at the official guide:
From Harmony ONE (current players): https://medium.com/defi-kingdoms-official/how-do-i-get-from-serendale-to-crystalvale-current-dfk-players-7cb1e2a39421
For new users on DFK Chain: https://medium.com/defi-kingdoms-official/getting-started-on-dfk-chain-new-users-bac90ea6a75a
Keep in mind the transactions shouldn’t take longer than 5 minutes unless the network is extremely congested (launch day etc.) . Once you have bridged your tokens to DFK chain, it is time to take a look at the liquidity pools (LP).
The DFK team has specified more LP pools will be added on Crystalvale. Currently, there are:
- JEWEL-xJEWEL (80%)
- CRYSTAL-USDC (7.5%)
- CRYSTAL-AVAX (7.5%)
- CRYSTAL-JEWEL (5%)
Risks of Liquidity Pools
If you understand the risks, please skip to the next section.
Just like stocks and forex, the liquidity pools also carries their own risk. The biggest risk of providing in the liquidity pools is impermanent loss.
Impermanent loss happens when you provide liquidity to a liquidity pool, and the price of your deposited assets changes compared to when you deposited them. The bigger this change is, the more you are exposed to impermanent loss. In this case, the loss means less dollar value at the time of withdrawal than at the time of deposit. -Binance Academy
For example (simplified with easy numbers):
- I stake 1 JEWEL and 100 ONE in the respective pool on Defi Kingdoms JEWEL-ONE Garden
- In a week 1 JEWEL is equal to 200 ONE
- If I held my initial 1 JEWEL and 100 ONE, I would have gained 50% (100 ONE is the same, but my JEWEL is now worth 200 ONE)
- Being an AMM in the JEWEL-ONE pool on Defi Kingdoms, my gain is less than the 50% of what I would have made if I simply held both assets
The APR helps offset some of the risk. As long as both prices of the asset does not diverge and go opposite ways, the impermanent loss will be minimal. It is called that because the loss is not realized unless the stake is withdrawn. If JEWEL goes back to 100 ONE, and I withdraw my funds, then there wouldn’t be any impermanent loss.
Below are a few calculators to help you visualize the gain and losses:
The other risk you have is JEWEL or CRYSTAL price goes down. Your LP token value goes down and they are worth less than when it was created. The high APR’s of the LP gardens is what makes up for the volatility of the price action of CRYSTAL. In order to attract investors to become automated market makers and provide liquidity, it is a must to offer high APRs to compensate for the risk they are taking.
An automated market maker (AMM) is the underlying protocol that powers all decentralized exchanges (DEXs), DEXs help users exchange cryptocurrencies by connecting users directly, without an intermediary. Simply put, automated market makers are autonomous trading mechanisms that eliminate the need for centralized exchanges and related market-making techniques. In this guide, we will explore how AMMs work.
How to Create the JEWEL-xJEWEL Pool
You want to head over to the trader in the the marketplace.
Click on him and a box will pop up. You want to select 50% JEWEL on the first box and xEWEL as the token you want on the second box.
You then swap it into xJEWEL. Once confirmed, you are done here. Head over to the Druid, who is on the left side of the trader and you want to buy seeds from him.
You want to use the JEWEL and xJEWEL you split earlier from the trader and put them in here. Then you want to click supply. It will provide you with the LP tokens. After that is confirmed, you want to head over to the gardens.
In the gardens, you want head over to the JEWEL-xJEWEL pool. Click on the seed box to pull up the liquidity pools available. The first one will be the JEWEL-xJEWEL pool.
Since I already have created the LP tokens and have deposited some, it says manage on the green box. Otherwise, it will say deposit. Click on it and it will show you another screen:
You want to click on deposit and it will prompt you to deposit your LP tokens that you created from the Druid. It will take you to another screen and give you the option to put your LP tokens there.
Most of the time, you will put the max amount in there. It will then prompt you to approve once you put them in there. Once you approve DFK chain to authorize the transaction, it will finally let you deposit the LP token. That is the end. From now on, you will be in the JEWEL-xJEWEL pool!
How to Remove Your LP Tokens from the Crystalvale Gardens
If you decided you want to pull out your tokens, you can do that by heading over to the Druid. Do keep in mind that are fees associated with pulling them out depending on the time you took it out. Here is a quick summary taken from the Defi Kingdoms white paper.
Garden Staking Deposit and Withdrawal Fees
There are no deposit fees for staking LP tokens in the Gardens. To protect against flash loans and pump and dumps, we do implement withdrawal fees for withdrawing staked LP tokens. Each withdrawal resets the fee timer. The withdrawal fees are listed below:
0.01% fee if a user withdraws after 4 Epochs
0.25% fee if a user withdraws after 2 Epochs but before 4 Epochs
0.5% fee if a user withdraws after 5 days but before 2 Epochs
1% fee if a user withdraws under 5 days.
2% fee if a user withdraws under 3 days.
4% fee if a user withdraws under 24 hours.
8% fee if a user withdraws under 1 hour.
25% slashing fee if a user withdraws during the same block.
You see that there is a manage button at the bottom of your LP pool. Click on it and you can choose withdraw.
Keep in mind that when you withdraw your tokens, it will also collect the locked and unlocked CRYSTAL that was mined as well.
To track the value of your LP in the Crystalvale gardens, you can use:
They give you a rough idea of the total value of your assets as the price of CRYSTAL or JEWEL fluctuates. To track both JEWEL and CRYSTAL prices, I recommend Dex screener: