⚠️This is for educational purposes only, use of the information is at your own risk⚠️

The Open Network is the most user-friendly blockchain ecosystem in the world and thanks to Telegram, it's onboarding an incredible number of new users to the Web3. But like many blockchains in the growth stage, it faces a liquidity problem.

Liquidity can be of two kinds: external liquidity is provided through bridges and exchanges, while internal liquidity is achieved through the ability to reuse on-chain assets. Before the EVAA Protocol was deployed on the mainnet, internal liquidity was unavailable to TON users.

EVAA offers a secure on-chain solution to this problem - creating the liquidity layer on top of the existing TON DeFi protocols. A good example is leverage staking, which we have talked about several times: users stake TON, use the resulting LSD tokens, like tsTON and stTON, as collateral, borrow an additional TON, and repeat the cycle.

Until now, decentralized trading platforms like DeDust and Storm Trade lacked a solution for liquidity leverage. To address this and support the growth of the TON ecosystem, we have introduced the LP Pool to use LP tokens from DeDust and Storm Trade as collateral. The LP pool includes assets such as USDT, TON, DeDust TON/USDT LP, Storm Trade TON LP, and Storm Trade USDT LP.

LP Pool’s smart contracts are similar to the Main Pool and the only additional risk here is the risk of something going wrong with DeDust or Storm Trade, which have proven to be good products. To learn more about how EVAA's insulated pools work, read our previous article.

Now, as our liquidity leverage solution for TON DEXs users and liquidity providers is available, let’s start with the basics—for those who were tapping Hamster yesterday.

What are DeDust and Storm Trade?

DeDust and Storm Trade are among the top decentralized exchanges on the TON blockchain, proven for their high quality.

They allow trading and swapping directly in Telegram through integrated Mini Apps, using the non-custodial TON Space wallet for transaction signing, making the process as convenient and secure as possible.

DeDust and Storm Trade, together with EVAA, emerged as winners at the global TON Hackathon by DoraHacks and TON Foundation in 2023. Years later, our partnership has produced high-quality TON DeFi supported by strong teams and vibrant communities.

How to Earn Fees on DEXs?

On DEXs like DeDust and Storm Trade, you can earn fees by providing liquidity to trading pools. Participants earn fees from swaps conducted within these pools, with earnings increasing as the trading activity rises.

What are LP Tokens?

When you contribute your tokens to a liquidity pool on a DEX, you receive Liquidity Provider (LP) tokens. These tokens represent your share of the pool and entitle you to a portion of the transaction fees generated from swaps.

Why Do We Need a Separate Pool for LP Tokens?

The second pool for LP tokens is created mainly for security reasons. By keeping the LP tokens in a separate pool, we mitigate risks related to both DeDust and Storm Trade. This approach provides an additional layer of protection, ensuring that issues with one platform don't affect the Main Pool. To learn more about how isolated pools work in EVAA, read this article.

The main purpose of this pool is to enable leveraged farming strategies on TON. By using LP tokens as collateral, users can borrow, reinvest, and significantly boost their yield.

Is Leveraged Farming the Future of DEX Liquidity?

Leveraged farming through the new LP Pool presents a highly efficient alternative to traditional DEX farming. Users can continue earning rewards while using their LP tokens as collateral to borrow USDT and TON, which they can reinvest into liquidity pools.

This shift toward lending and borrowing strategies allows for greater liquidity utilization and higher returns, making it a compelling option as DEX farms may lose appeal over time.

How Does It Work in Storm Trade?

In the Storm Trade pool, after supplying USDT or TON, you receive Storm LP tokens (SLP).

These SLP tokens can then be used as collateral to borrow back the same assets (TON or USDT) that you initially supplied. This process creates a cycle where you can reinvest the borrowed assets at the Storm Trade same pool, effectively multiplying your rewards and compounding your returns.

How Does It Work in DeDust?

In DeDust, after delivering USDT and TON to the TON/USDT pool, you get TON/USDT LP tokens, deliver them to EVAA, then you will need to borrow USDT and TON in equal amounts based on their market value and put the borrowed tokens back into the liquidity pool on DeDust to maintain your liquidity position.

Will You Still Swap Fees by DEXs if You Supply DEX LP Tokens to EVAA?

Yes, when you supply LP tokens from DeDust or Storm Trade to the EVAA Protocol, you will continue earning both liquidity provision rewards (e.g., from DeDust) and swap fees.

In both Storm Trade and DeDust, rewards are distributed similarly. Swap fees from liquidity pools accumulate, increasing the value of the LP tokens, which allows users to indirectly receive these rewards when supplying LP tokens in EVAA.

For example, Dedust's portfolio module will monitor your LP tokens in the EVAA Pool, meaning that even if you supply your Dedust LP tokens to EVAA, you will still receive rewards as if you were holding them directly in your own wallet. This mechanism ensures that you don't miss out on liquidity provision rewards, even when your tokens are used as collateral within the EVAA Protocol.

It's important to note that this functionality is not yet live. Dedust is in the final stages of completing this feature, so be sure to follow their updates, as the release of this functionality is imminent.

The formula for calculating your rewards is based on the utilization rate of the LP Pool:

For example, with the DeDust TON/USDT-LP token, the utilization rate is notably low at 6.07%.

If there is $1 million supplied to EVAA, and $10,000 in rewards is available, we can apply it to the formula:

Why is it Profitable to Supply USDT and TON in the LP Pool?

Supplying USDT and TON in the LP Pool is highly profitable because the interest rates are higher. This is due to the elevated rates in both DeDust and Storm Trade, making it very advantageous to supply these assets. By utilizing the LP Pool in EVAA, you can take advantage of these higher rates, ensuring better returns for your supplied USDT and TON compared to other pools.

Will I Earn EVAA XP in the New LP Pool?

Yes, you will earn EVAA XP in the new LP Pool. The XP rewards are substantial, offering high returns for both supplying and borrowing assets.

For each dollar in asset value, you will receive the following XP:

• Supply USDT: 15 XP

• Borrow USDT: 15 XP

• Supply TON: 10 XP

• Borrow TON: 10 XP

This makes participating in the LP Pool especially rewarding, particularly during its growth phase, where the EVAA XP rates for USDT and TON will be higher than in the Main Pool.

How to use LP Tokens in EVAA?

To get started with the EVAA’s LP Pool, you will need to have LP tokens (DeDust TON/USDT LP, Storm Trade TON LP, or Storm Trade USDT LP). If you do not have these tokens yet, you can refer to the guides from Storm Trade and DeDust to learn how to acquire them.

Step 1: Connect Your Wallet

On the main dashboard page, in the top right corner, click the "Connect Wallet" button to connect your crypto wallet to the EVAA Protocol. This will open the interface where you can select your wallet.

Step 2: Navigate to the "Market" Tab and Select a Liquidity Pool (LP)

Once your wallet is connected, navigate to the Market tab at the top of the screen.

On the Market page, you will see the Highest APY Assets section, which displays the assets with the highest APY rates. Here, you can already notice new assets available for supply or borrowing, such as USDT, TON, or liquidity pools like TON/USDT-LP.

Further down on the Market page, in the Market Overview section, switch to the LP (Liquidity Pool) tab.

Here you’ll find available pools like TON/USDT-LP, USDT, TON, and others with corresponding APY rates and borrowing conditions. Choose the liquidity pool you’re interested in, such as TON/USDT-LP.

TON and USDt rates in the LP Pool are expected to be higher as people borrow to increase their LP positions in DeDust and Storm. We would appreciate your support in providing liquidity to TON and USDT to launch a new pool and advanced tier of DeFi strategies on TON.

Step 4: Supply Selected LP Token to the Pool

After selecting the pool, for example, TON/USDT-LP, click the "Supply" button. This will open a window with the supply details: your wallet balance, the maximum amount you can supply, the APY rate, your health factor, and estimated gas fees.

1. Enter the amount you want to supply (e.g., 10 TON/USDT-LP).

2. Choose the percentage (e.g., 25%, 50%, 75%, or 100%).

3. Review all the parameters, including the estimated gas fees.

4. Click "Supply" to confirm the transaction.

Step 5: Borrow Assets

After supplying assets to the pool, you can return to the main dashboard and select an asset to borrow (e.g., TON or/and USDT).

Now that you have borrowed TON and USDT, you can use these borrowed assets to provide liquidity to pools of your favorite products, such as:

• Storm Trade pools for USDT or TON

• Dedust pool for USDT/TON

This way, you can repeat the cycle and continue maximizing your earnings.

Reminder

This material is provided for educational purposes only. Any use of the obtained information is at your own risk. The author and the platform are not responsible for the possible consequences of putting this knowledge into practice.