Mangrove Vaults: How to Unlock New Passive Incentives

Mangrove’s Vault LP rewards are here! With rewards flowing daily in $MGV, the earlier you jump in, the higher your potential returns. Mangrove’s Vault LP rewards incentivize liquidity providers (LPs) by distributing rewards based on their contributions to specific vaults. These rewards, distributed in $MGV tokens, are proportional to the value of liquidity provided and the duration of participation.

How Do Vault LP Programs Work?

Program Structure

  • Each vault has its own dedicated reward program

  • Programs run for a fixed duration (typically one month)

  • Rewards are distributed continuously based on users' LP token balances

  • Each program has a predetermined budget (maximum rewards)

  • Important: Program parameters (budget and duration) may be adjusted upward only

Reward Distribution

  • Rewards flow continuously to LP token holders

  • The reward rate is specified per day

  • Users earn rewards proportional to their share of the total LP tokens

  • Early liquidity providers may benefit from a slight advantage as the share value typically grows over time

Important Note for Early LPs

Early liquidity providers have a natural advantage in these programs. As more users join and the total value in the vault increases, the share value of LP tokens will gradually rise. This means:

  • Early LPs will receive slightly higher rewards per dollar of liquidity

  • The reward rate per dollar will naturally decrease as more liquidity joins

  • This decrease is typically minimal and helps reward early supporters

Reward Claims

Please note that rewards will be claimable once the MGV token becomes transferrable. Until then, rewards will continue to accumulate based on your LP positions.

What Are the Current Programs?

Below are the active LP programs launching on December 23rd, 2024, and running for one month until January 23rd, 2025. Each program has a budget of 600,000 MGV tokens.

Trading Pairs and Reward Rates

  • ARB-USDC ~0.01 MGV per $ per day

  • WETH-USDC ~0.01 MGV per $ per day

  • WBTC-USDT ~0.01 MGV per $ per day

  • weETH-WETH ~35 MGV per ETH per day*

  • USDC-USDT ~0.01 MGV per $ per day

*Note: For the weETH-WETH pair, a static value of 3500 USD per ETH is used for reward calculations. This means the reward rate is effectively around 35 MGV per ETH (not per dollar) per day.

Program Design Rationale

The reward rate of approximately 0.01 MGV per dollar per day has been carefully chosen to:

  • Provide meaningful incentives for liquidity providers

  • Ensure sustainable distribution of rewards throughout the program duration

  • Create a balanced reward structure across different trading pairs

How to Participate in Vault LP Programs?

To participate in these programs:

  1. Provide liquidity to any of the listed vaults

  2. Hold your LP tokens

  3. Rewards will automatically accrue based on your LP token balance

  4. Rewards will become claimable once the MGV token is transferable

Monitoring Your Rewards

Your rewards will accumulate continuously based on your LP token balance. The actual rewards earned may vary slightly depending on:

  • The total liquidity in the pool

  • The duration you maintain your position

  • The timing of your entry relative to other LPs

Program Flexibility

Please note that while the initial parameters (budget and duration) are set, these values may be adjusted upward in the future. Any such adjustments will only increase the rewards or duration, never decrease them.

Reward Calculation Example

Let's walk through a hypothetical example to illustrate how the rewards mechanism works:

  • A user deposits the equivalent of $1,000 into the USDC-USDT vault

  • They maintain this position for 10 days

  • The reward rate is 0.01 MGV per dollar per day

  1. Daily MGV rewards = $1,000 × 0.01 MGV/$ = 10 MGV per day

  2. Total MGV rewards for 10 days = 10 MGV × 10 days = 100 MGV

IMPORTANT DISCLAIMER: The following calculations use a hypothetical token value for illustration purposes only. This is NOT the actual or projected value of the MGV token. Users should not rely on these figures for investment decisions.

To help understand the magnitude of rewards, let's use a purely hypothetical example value:

Assuming a hypothetical FDV (Fully Diluted Valuation) of $100,000,000:

  • With total supply of 1B MGV, each MGV would be valued at $0.10

  • 100 MGV earned would be equivalent to $10 in rewards value for 10 days

  • This would represent an annualized rate of approximately 36.5% APR on the $1,000 principal

Important Notes

  • The actual value of MGV tokens has not been determined

  • The example above uses arbitrary values for illustration only

  • Actual returns will depend on:

    • The future market value of MGV tokens once transferrable

    • Changes in total liquidity in the pool

    • Duration of liquidity provision

    • Potential adjustments to reward rates

    • Market conditions and other factors

Ready to maximize your DeFi earnings? Join Mangrove’s Vault LP programs today and let your liquidity work smarter for you.

Stay tuned for updates—follow us on X and join the discussion on Discord!

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