Staking, lending, and liquidity mining are the three key income sources in DeFi.
Staking and lending provide relatively stable income. While the returns aren't huge, the risks are lower. In contrast, liquidity mining carries the most risk but often promises higher rewards.
Among the three, liquidity mining stands out due to its potential for high returns and the complexity of its processes. It has become one of the more challenging yet lucrative income sources in DeFi.
Orange Finance is an innovative protocol that has made new breakthroughs in increasing liquidity mining rewards and simplifying operations.
1. Main Pain Points of Liquidity Mining
Unstable Returns: Liquidity providers usually rely on transaction fees and token rewards to earn income, but these returns are highly affected by market fluctuations. In bearish markets, returns can decrease significantly, or providers may even face losses. This makes many liquidity providers hesitant to participate in mining.
Complex Operations: The process of liquidity mining is often complex, requiring users to have technical knowledge and experience. The intricate steps make it difficult for beginners to get started, limiting broader participation in liquidity mining.
2. Orange Finance’s Solutions
Orange Finance focuses on addressing these two core pain points by increasing returns and simplifying the process, offering users a better liquidity mining experience.
Higher Returns: Orange Finance employs an innovative strategy that combines options liquidity with spot liquidity to provide multiple income sources. This allows liquidity providers to earn transaction fees from the spot market and additional returns from participating in the options market. This diversified approach helps users maintain more stable earnings across different market conditions, boosting their confidence and participation.
Simplified Operations: To lower the barrier to entry, Orange Finance has automated and simplified the liquidity mining process. With automated tools and a user-friendly interface, users can participate in liquidity mining without needing complex technical operations. This simplification makes it easier for beginners to join while reducing the risk of errors.
3. How to Participate
Currently, Orange is conducting an airdrop points event. Click the link to access the following page, connect your wallet, bind your Twitter account, and enter an invite code to start earning airdrop points.
Use the invite code: S3EBJM. While I receive referral rewards, you will also get a 1.1x points multiplier. If you think Orange is great, you can follow the guide below to refer it to your friends. This way, not only do you earn rewards, but they also get a 1.1x points boost.
After registration, click the "Liquidity Vault" menu and select the trading pair you want to participate in. Prioritize the one with the highest current APR.
Let's take WETH-USDC as an example.
In the image above, Orange highlights a 1.4x boost compared to regular liquidity mining. 140%—this is a significant increase. The secret to this higher return is Stryke, pointed out by the arrow. Stryke is an options protocol, and while Orange provides liquidity to PancakeSwap, it also provides liquidity to the Stryke options protocol. The income sources include both transaction fees and options fees.
On the right side of the image, you’ll notice the WETH circle. You don’t need to pair it; you can just deposit WETH directly. This is Orange’s solution to reducing complexity.
The only thing to note is that when you deposit WETH, Orange Finance charges a 0.1% fee.
Conclusion
Logically, Orange should offer higher returns than other liquidity mining options. But is that really the case? This still needs to be tested through real-world experience. The experiment is ongoing.
From the preliminary results shown in the image above, Orange’s liquidity mining outperforms Stryke’s options-only liquidity, but how does it compare to other liquidity mining protocols? This will take a longer time to determine.
However, you’ve likely noticed that this is another example of a combinatory innovation in blockchain protocols:
Options + Spot = Orange.
We've already seen similar innovations in projects like Juice, Stella, and Extra, which leverage liquidity mining by using collateral and staking strategies (see "Leverage + Mining = The Best Strategy for Re-Staking?"). This is why blockchain evolves so rapidly. Of course, the deeper reason behind continuous blockchain innovation is the open-source nature of all protocols.
In the blockchain world, the ideal of “everyone for me, and me for everyone” has truly been realized.
About Airdrop Reference
Airdrop Reference is an innovative blockchain education and promotion platform aimed at spreading basic blockchain knowledge and helping ordinary users understand and participate in the development of blockchain technology. The mission of this project is to lower the entry barriers to blockchain, promote high-quality blockchain projects, and allow more people to enjoy the benefits of the Web3.0 era.
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