To bring Exactly Protocol’s users an efficient way to use their EXA tokens, the community is introducing the new self-custodial Proto-Staking Program, powered by Velodrome, to easily stake their EXA while earning VELO.

How The Self-custodial Proto-Staking Works

The Proto-Staking Program is an automated solution facilitated by Velodrome, specifically for the EXA/WETH pool. It provides users the ability to deposit their EXA into this pool and earn attractive VELO APRs through their staked EXA.

This staking program is a self-custodial feature, which means that the smart contract will only operate for the user, not keeping any assets.

Users can monitor their liquidity provider (LP) positions and claim VELO emissions on Velodrome’s dashboard. Further, the EXA/WETH pool APR, staked EXA amount, and claimable VELO can be viewed on the Exactly Protocol’s web app.

Potential Exposure to Impermanent Loss

By engaging with the Proto-Staker contract within Exactly Protocol, users should be aware that they may be exposed to a phenomenon known as impermanent loss. This financial risk is prevalent in dApps, where liquidity is provided to automated market makers (AMMs).

Impermanent loss can occur when the price ratio of the provided assets changes, resulting in a temporary discrepancy between the current value of the held assets within the liquidity pool and the value if held outside the pool. In the context of the EXA/WETH Liquidity Pool, price changes in either EXA or WETH can trigger this loss, impacting the overall value of the contributed assets. Users should carefully consider this risk and monitor the price movements of the involved assets when interacting with the Proto-Staker.

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