Nectar Liquidity Pool (NCLP)

Overview

The Nectar Liquidity Pool (NCLP) consists of an index of ERC20 tokens to provide efficient token swaps, HOO game rewards, and enables users to earn rewards by providing liquidity. The pool accepts the following tokens: wETH, wBTC, USDC, USDT, jUSDC, GLP, jGLP, xRDO, GMX, and stETH.

Token Composition and Targeted Weights

The Nectar Liquidity Pool maintains a targeted weight distribution among the supported tokens to ensure optimal liquidity. The target weights for each token are as follows:

  • wETH: 25%

  • wBTC: 10%

  • USDC: 5%

  • USDT: 10%

  • jUSDC: 15%

  • GLP: 10%

  • jGLP: 10%

  • xRDO: 5%

  • GMX: 5%

  • stETH: 5%

These weights represent the desired proportion of each token within the pool.

Minting and Redeeming NCLP

Minting

Minting NCLP tokens in the Nectar Liquidity Pool (NCLP) involves first depositing a supported token. NCLP tokens will be automatically staked after minting, and will begin to earn Escrowed AMBR and fee rewards.

The fees for minting/redeeming NCLP using each supported token and using these assets in races/matches are dynamically adjusted based on a token's balance relative to its target weight. Lower fees are applied to tokens that are underrepresented in the pool, incentivizing users to deposit those tokens and maintain the desired balance. Conversely, tokens that are overrepresented will have higher deposit fees.

Redeeming

Redeeming NCLP tokens enables users to withdraw their tokens from the liquidity pool. The amount of tokens redeemed will depend on the specific pool asset chosen for redemption. Redemption fees are designed to scale inversely to the minting fees, meaning that the fees will be lowest for assets that are overrepresented in the pool. This mechanism encourages users to rebalance the pool by withdrawing assets that have exceeded their target weight, thereby optimizing the pool's composition and ensuring efficient liquidity provision.

Rewards

NCLP holders will earn rewards in the form of $esAMBR tokens and platform fees distributed in ETH. The $esAMBR tokens and ETH platform fees are allocated based on the user's share of the liquidity pool.

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