Hydroponic farms are back on Liquidswap: New yield farming pools on Aptos
Table of Contents
On June 9, the second generation of Aptos yield farms went live on Liquidswap. Deposit liquidity in APT-USDC, APT-USDT, and other pools; stake your LPs and Pontem NFTs; and earn a very attractive APR. Read on for a step-by-step tutorial.
Meed Hydroponic Farms 2.0:
The long wait is over! After a huge success of the first generation of Liquidswap yield farms, here are the 3 new pools where you can earn rewards starting from June 9:
LayerZero USDC and USDT are used for all the farms. Two more stablecoin pools should become available a week later.
In case you forgot why our liquidity mining program is called Hydroponic Farms: hydroponics is a way to grow plants without soil and produce up to 10x larger yields.
The first generation of Hydroponic Farms was a huge success back in Q1 2023, but the new ones are even better, for a few reasons:
- Improved UI. We’ve had almost six months to collect feedback from you and make changes.
- Great APR. Weekly rewards are calculated in such a way that early participants can earn over 40% APR - and all those rewards are in APT.
- Lower gas. Thanks to the recent overhaul of the Aptos gas system, all farming transactions now have much lower gas fees.
- Clear APR display. The farms now display both the APR in % and the weekly reward in APT per 1 LP.
What’s the farming APR?
When you browse the new Hydroponic Farms, you’ll see that the reward rate is listed both as APR in % and as APT per LP per week. We made sure that Hydroponic Farms have a competitive APR compared to other yield farming programs on Aptos.
Keep in mind that the reward rate changes all the time. It depends on how many LPs are deposited in the farm. The total amount of weekly rewards allocated for a farm is fixed, so if you divide it by more people (LPs), you get less.
If you enter a farm very early, you’ll enjoy a higher APR for a while, but it will go down as more people join. It’s normal for the initial APR to be around 40-50% and eventually go down to 10% and lower. Therefore, early participants get an advantage.
Example: the weekly reward rate in the APT-USDC pool is $300, and there is $9000 in LPs already staked in the farm. You deposit another $1000, so that now you have 10% of the farm. You are entitled to10% of the rewards, or $30 per week. This translates into ($30/7)*365=$1564 a year, or 156.4% APY.
Now let’s imagine that a few days after you deposit LPs, another person adds $1000 in LPs to the farm. Now the TVL is $11000, so your $1000 is roughly 9.1% of the farm. You’ll earn 9.09% of the same weekly reward. That’s $27.27 a week, or 142.2% APR.
Remember: with every new LP added to the farm, the APR goes down a little bit. The reward rate you see on the page is the annualized reward based on current data.
How many LPs you’ll get also depends on the pool. In some pools, $100 in liquidity can give you 0.1 LP, while in others just 0.01. The way the value of 1 LP is calculated is complex and stems from the initial amount of liquidity at pool creation and other factors.
Will I still earn liquidity provider rewards?
Of course! You’ll be earning an APR as a liquidity provider, plus farming rewards. For the current APR in liquidity pools, check the Pools page.
Example: you deposit liquidity in the APT-USDT pool, which currently has around 50% APR, and then stake the LPs in the APT-USDT farm, where the APR is (let’s say) 25%, together with a Space Pirate NFT (+20% boost). The total APR will be between 80% (50%+25%*1.2)and 125% ( 1.5*1.25*1.2=2.25), depending on whether you actively withdraw the farming rewards and reinvest them in the liquidity pool for compounding. Note that there is no auto-compounding in the farms.
- APT-USDC: Space Pirates, +50%
- APT-USDT: Dark Ages, +20%
- APT-WETH: Space Pirates, +20%
The upcoming stablecoin farms will offer boosts for Dark Ages.
In order to enjoy a boost, you’ll need to stake a Pontem NFT in the farm together with LPs. Technically speaking, this boosts the size of your LP stake itself, rather than the reward rate. For example, if you deposit 1 LP and a Pontem Space Pirate/Dark Ages, the contract will calculate rewards as if you had 1.5 LP. You can add an NFT at the same time when you add LPs to the farm or later.
If you don’t have a Pontem NFT yet, check them out on Topaz:
In addition to increased staking rewards, the Pirates provide an access key to a whole Pontemverse of utility. For starters, each collection has its own DAO on OrderDAO, where NFT holders can vote on various proposals.
In the future, projects will be able to create farms boosted by other NFT collections of their choice.
Hydroponic Farms vs. APT staking: understand the difference
Liquidswap now offers both yield farming and native delegated APT staking. You’ll find both in the Earn section, but they are completely different products.
- Farms require that you first add liquidity to a swapping pool, such as APT-USDT. In return, you’ll get LP tokens, which you can deposit in the corresponding Hydroponic Farm. The farms are offered by Pontem in partnership with project teams.
Rewards will start to accumulate immediately, and you can claim them any time, as long as the accumulated amount is more than 0.01 APT. The LPs will be locked in the farm for 7 days - after that, you can withdraw them at any moment. Next, you can remove liquidity from the pool if you wish.
Farming rewards are calculated per 1 LP per week. The APR depends on how many LPs have already been deposited and can differ greatly from farm to farm. Rewards are normally paid in APT, but can also be paid in one of the tokens participating in the farm. You’ll get a reward boost if you also stake a Pontem NFT (Space Pirate or Dark Ages, depending on the farm);
2) Delegated APT staking requires that you pick one of the active validators in Earn -> Staking and stake your APT on them. In return, you’ll get a share of the validator’s rewards. You don’t need to add liquidity to a pool, and there are no LP tokens.
Staked APT will be locked for a period of up to 30 days, depending on where in the staking cycle you deposit the tokens. The expected APR is 7%. All rewards are paid in APT. To claim the rewards, you’ll need to wait for the next unlock and withdraw some or all of APT from staking.
Native delegated staking is enabled by the Aptos team, which also whitelists the validators who can be staked on. Pontem can’t influence the list of available validators, or the APR.
If you have APT staked on a validator but would prefer to use it for farming instead, make sure to set the coins for withdrawal before the nearest unlock date. If you miss this date, you’ll have to wait another month.
Once APT appears in the Unlocking tab, it will become available for withdrawal on the day of the unlock. You’ll be able to claim it manually and put it in the new Hydroponic farms for a higher APR.
Can a project on Aptos launch its own yield farm on Liquidswap?
This is a question that Pontem often gets from projects in the Aptos ecosystem. The answer is yes - but there are a few rules to follow:
- A token needs to be whitelisted on Liquidswap first. This requires submitting an audit report and a public (doxxed) team, among other things. To start the process, click the List Your Token icon in the bottom right corner of the Liquidswap interface to go to the listing questionnaire. Our Marketing & Partnership Lead will contact you.
- A yield farm requires a smart contract, and it’s up to the project launching the farm to develop that contract. Pontem’s devs can provide some guidance, but you’ll need to do the coding.
- The project will also need to take care of the rewards, which can be paid in any token issued on Aptos (including the project’s own token, of course).
Step 1: Select a pool
Every Hydroponic Farm corresponds to a liquidity pool with two tokens: APT-USDT, USDC, etc. You’ll need to add liquidity to one of them before you can farm rewards. Browse the list of new Hydroponic Farm pools and keep in mind the following:
- Bridged tokens. All our farms feature stablecoins bridged using LayerZero. If you don’t have USDC or USDT yet, you can buy them on Liquidswap, but make sure you are buying the correct one. If you are going to bridge some yourself from Arbitrum, BNB Chain, Polygon etc., use the bridge and make sure to read the guide first.
- Reward rate/AOR. This is just the farming rewards, not including liquidity provider rewards. You’ll be earning both. A farm can have a lower reward rate per LP but be attached to a liquidity pool with a high APR, so the cumulative rewards will be higher.
- NFT boost. We recommend that you stake an NFT and LPs at the same time, but you can also add an NFT later.
- Time left. Every farm will be initially active for 1 month until July 9, with possible prolongations for up to 6 months. Once a farm expires, rewards won’t be distributed anymore. Hover over the calendar icon to see the start and end dates. Note that there is no automatic LP unstaking yet: when a farm ends, you’ll need to manually withdraw the LPs and then the liquidity.
- Add liquidity. Click on this button to go directly to the pool’s page where you can add funds to a swapping pool to get LP tokens. You’ll need to deposit equivalent amounts of both tokens in a pool: for example, $100 worth of APT and $100 worth of USDT.
Also, when choosing a farm, consider a couple of features of the underlying liquidity pool:
- Trading volume and APR
As a liquidity provider, you’ll also earn a share of the trading fees, so you want a pool with high trading volume. (More trades means more fees.) You can find this information in the Stats section.
In general, if two pools have a similar farming APR, you might consider choosing the one with the higher income from trading fees.
- Pool reserves
As a beginner, it’s safer to start with larger liquidity pools, as they are less susceptible to high volatility, liquidity dumps, and other risks. In this tutorial, we will use the APT/USDT (LayerZero) pool as an example.
Step 2: Add liquidity to a pool to get LP tokens
You need to be a liquidity provider to start farming, so we’ll begin by depositing tokens in a pool. You’ll need to add equivalent amounts of both assets: 10 APT and 10 APT’s worth of USDT, for example.
- Connect your Aptos wallet to Liquidswap. We recommend Pontem Wallet.
- If you don’t have enough APT, you have two options: 1) buy some on a CEX like Binance or KuCoin and withdraw it to Pontem Wallet; 2) bridge USDT, USDC, or WETH from Ethereum, BNB Chain, Polygon, Arbitrum etc. using LayerZero, then buy APT. See the bridging guide and the FAQ for details.
- If you don’t have enough USDT, USDC, etc. in the wallet yet, try seamless native swaps in Pontem Wallet. No need to visit the Liquidswap website - simply click on Swap on the wallet homescreen. . Make sure to select LayerZero USDT and the correct pool version (V0 or V0.5, whichever has higher reserves).
If one of the tokens isn’t registered in the wallet yet, you’ll need to register it first (and pay a small gas fee). You can also add tokens directly in Pontem Wallet by clicking Import Tokens.
- Back on the Hydroponic Farms page, locate the pool on the list, and click Add Liquidity. Note the current APY: XXX APT per week per LP. This will keep going down as the farm’s TVL increases.
You can also add liquidity through the Pools section on Liquidswap. Or, if you are already a liquidity provider and that same pool is on the list of active farms, you can stake the LPs directly in the farm.
Enter an amount in USDT to see how much APT you’ll need to deposit, or vice versa. Make sure to leave enough APT for gas fees, both for this and future transactions!
Note the APR in the liquidity pool (52.34% in this screenshot). APR stands for ‘annualized reward rate’: the amount you’d earn in a year if the yield rate remained the same.
The APR calculation on Liquidswap is based on the pool’s trading fee revenue for the past 7 days. It changes all the time.
When you join a farm on Liquidswap, you’ll earn both a trading fee APR as a liquidity provider and the farming APR.
Make sure that the correct curve type is selected. For two assets whose prices are independent from each other (like APT/USDT), it should say Uncorrelated. For stablecoin pools, such as USDT/USDC, it should say Stable. In most cases Liquidswap will make the correct choice for you, but it’s always worth checking.
- Click Add Liquidity and confirm the transaction in the wallet. In this example, we received 62.95 LP for $50 worth of liquidity.
Note how low gas fees are on Aptos, especially after the recent gas optimization: 0.0007 APT, or less than $0.01! On Uniswap, it would cost you over $15 in fees to supply liquidity.
The LP tokens are proof that you own a share of the pool and are entitled to a share of the swapping fees that it earns. If you decide to withdraw the liquidity, you’ll need to burn the LPs (after withdrawing them from the farm).
The LP tokens should now appear in your Pontem Wallet. They are displayed as APT-USDT (or USDT-USDC, APT-USDC, etc., depending on the pool).
That’s it - you’ve just supplied liquidity to the APT-USDC pool! It’s time to start farming.
Step 3: Stake LPs in the farm
Back on the farming page, click ‘Stake’. (If you still see ‘Add Liquidity’, refresh the page). Enter the maximum available amount of LPs down to the first two decimals. For example, if you have 62.9534 LP, enter 62.95.
The Stake button will become active. If you already have a Pontem NFT (Dark Ages for this farm), you can click on Add NFT to activate the reward boost. If you don’t, simply click on Stake and confirm the transaction in Pontem Wallet.
My Farms tab should open and display your farming position.
There is a 7-day lock period for each farm; that’s why the Withdraw button is initially grayed out. During the lock period, you can collect the rewards but not withdraw the LPs. After 7 days, you’ll be able to claim the liquidity from the farm.
The Claim button will remain inactive until you’ve accumulated at least 0.01 APT in rewards.
You can always add more liquidity to the pool and increase your farming position by clicking on Stake LP; however, this will reset the weekly locking period. For example, if your original unlock is on June 16 and you stake some more LPs on June 13, the new unlock date will be June 23.
If the farm closes before your unlock date, your LPs will automatically become available for claiming.
Step 4: Getting an NFT boost
A Space Pirate will give you a 50% reward boost, while a Space Pirate will give you +50%. Note that the contract boosts your stake rather than the reward rate (APY). So if you stake 1 LP, for example, and the boost is 50%, the reward will be calculated based on 1.5 LP. The result is the same as boosting the APY, or course; it’s only a question of coding efficiency.
You can boost only one farm with a single NFT. If you want to boost two farms, you’ll need two Space Pirates. Also, every farming pool accepts either Space Pirates or Dark Ages.
Go to My Farms and click on the Stake NFT button. There’s also a handy Discover button that will take you directly to the relevant collection page on Topaz.
Click on the Stake NFT button -> Add NFT -> select a Dark Ages NFT in your wallet using the small blue circle in the top right of the NFT image -> Choose NFT -> Boost -> Confirm in the wallet.
Once the transaction is processed, you’ll see ‘Boosted with” + the NFT name in My Farms. The button will change to Unstake NFT.
To remove the boost and get your NFT back, click on Unstake NFT, then confirm in the wallet. The NFT will soon reappear in the wallet’s Collectibles tab. Your reward APR will go back to the unboosted level, though.
Step 5: Collecting rewards and withdrawing LPs
Collect farming rewards
You can claim the rewards anytime, including during the initial 7-day locking period. The minimum claimable amount is 0.01 APT. Simply click Claim and confirm the transaction in the wallet.
Even after the farm expires, you’ll still be able to claim any remaining rewards.
Withdraw LP tokens
During the initial 7-day lock period, the Withdraw button will remain inactive. Once the lock is over, you’ll be able to click on Withdraw and enter the amount of LP tokens that you want to redeem. If you have an active NFT boost and you want to withdraw everything, don’t forget to check the Unstake NFT box.
Important: rewards are NOT automatically claimed when youI withdraw LPs. You’ll have to collect the rewards manually, and the amount has to be higher than 0.01 APT.
Now it’s time to try Hydroponic Farms for yourself! We would be very grateful for your feedback on Telegram, so that we can make the next generation of Liquidswap farms even better.
Subscribe to our Technical Updates channel on Telegram to be the first to learn about new features in Liquidswap and Pontem Wallet. And of course, follow Pontem on Twitter and Discord: the team is always ready to answer your questions.
Pontem is a blockchain product studio building for Aptos and the broader Move ecosystem. We work closely with the Aptos team to produce truly innovative and secure dApps and dev tools, including the Liquidswap DEX, Pontem Wallet, the first Solidity-to-Move code transpiler, ByteBabel, and Move Code Playground, the first browser code editor for Move.