News

Introducing Unalloyed Liquidity

Stixil

Nov 6, 2024 — 5 min read

"The imaginary, the functional, and operational are fused into a single hyperreal entity." - Jean Baudrillard

A New Type of Liquidity

Unalloyed Liquidity, or UL, is the unique system of liquidity utilized by SkyBridge. The Unalloyed Liquidity system enables the decentralized lending of assets for a 7-day period at a rate of 0.3% divided among the Unalloyed Liquidity Providers for their specific asset.

This type of liquidity provision is unique to SkyBridge, supports all Ethereum tokens from all projects, and requires only a single token to be deposited. Say goodbye to the days of impermanent loss. 🎉

Providing Unalloyed Liquidity Using SkyBridge

SkyBridge Unalloyed Liquidity Pools exist on Ethereum Layer-1 and facilitate Supersonic transfers, which is how SkyBridge bypasses the traditional seven-day withdrawal delay imposed by Optimism. Sufficient decentralized liquidity is required to enable the bypass for all ERC-20 tokens. The liquidity takes the form of a loan for an asset, as liquidity providers are loaning their tokens to individuals looking to bypass the seven-day delay.

How it works:

Unalloyed Liquidity providers retain 100% of the 0.3% liquidity fees collected via SkyBridge deposits and withdrawals. Aviator Technologies, LLC only collects the protocol fee.
The rewards are based on the volume of the tokens bridged and are accrued in real-time with every transaction.
Users can explore current APR/APY data per pool based on average volume.
Every token has its own individual pool. If the pool does not yet exist, the first ULP provider will initialize the pool to enable rewards for all users.
When you provide Unalloyed Liquidity using SkyBridge, there is a seven-day withdrawal period for rewards and initial liquidity.

We are currently exploring automatic compounding of ULP rewards.

Rewards (disclaimer, the tokens in this example are fake):

Example 1: 1,000,000 XYZ tokens are bridged using SkyBridge.
- XYZ Token ULP Rewards: (1,000,000 XYZ x 0.3%) = 3,000 XYZ
Example 2: 100,000 ABC tokens are bridged using SkyBridge.
- ABC Token ULP Rewards: (100,000 ABC x 0.3%) = 300 ABC
Example 3: 5,500,000 JKL tokens are bridged using SkyBridge.
- JKL Token ULP Rewards: (5,500,000 JKL x 0.3%) = 16,500 JKL

Example distribution of XYZ tokens to SkyBridge ULP providers.

Bridge XYZ	1,000,000 XYZ
LP Fee	0.3%
XYZ Liquidity Provider Reward	0.3%
Available Rewards	3,000 XYZ
XYZ Liquidity Pool Size	100,000,000 XYZ
Liquidity Providers in XYZ	Rewards in XYZ
10,000,000 XYZ	300 XYZ
25,000,000 XYZ	750 XYZ
30,000,000 XYZ	900 XYZ
35,000,000 XYZ	1,050 XYZ

Unalloyed Liquidity Events:

SkyBridge will feature an Unalloyed Liquidity Event option where projects or individuals can provide tokens to increase the Liquidity Rewards modifier for their respective pool on SkyBridge. This allows all existing Ethereum projects to instantly add new utility and user rewards for holders to temporarily lock their tokens.
The bonus rewards from Liquidity Events are added to your existing rewards.
The rewards modifier is set by the individual or team allocating tokens toward the Liquidity Event.
Example: token XYZ wants to incentivize more liquidity providers in SkyBridge, so token XYZ team allocates 100,000,000 XYZ toward a liquidity event at a 1000% rewards modifier.
- 1,000,000 XYZ tokens are bridged using SkyBridge.
- XYZ Token LP Rewards: ((1,000,000 XYZ x 0.3%) + (1,000,000 XYZ x (0.3% x 1000%)) = 33,000 XYZ
- Remaining Allocated XYZ Liquidity Event Rewards: 99,967,000 XYZ

Aviator Rewards

Upon the completion of SkyBridge, there is no Liquidity Fee for the transfer of AVI. To adequately reward Unalloyed Liquidity Providers, the Aviator DAO will be voting on the allocation of the yearly Uniswap liquidity fees paid out in AVI tokens for both Base & Ethereum Uniswap pools. The more volume AVI has on DEX, the more rewards accrue for liquidity providers.

To put this in perspective, during our first year of operations, we amassed just over 33,000,000 AVI from Uniswap Liquidity fees, which will be voted on for rewards allocation for the coming update.

What to expect:

Unlike the other pools that reward at a rate of 0.3% of total token volume, Aviator rewards will start at 1.0% of total token volume.
Aviator Rewards will be replenished every month to ensure complete exhaustion of DAO allocated funds.
- Example: 48,000,000 AVI tokens were allocated to rewards via the DAO. 48,000,000 / 12 = 4,000,000 AVI paid out per month. Using the Liquidity Event system, the Aviator team can adjust the payout rate based on projected volume to keep rewards continuous throughout the year.
Excess income via Aviator Arcade can also be considered for rewards via DAO, but are discretionary based on company finances.

Example: The Aviator DAO has allocated 10,000,000 AVI toward a liquidity event that will supply the rewards to AVI Unalloyed Liquidity providers. Based on the bridge volume, the team has determined that to adequately distribute the rewards promptly, the event will have a 1,500% modifier.

1,000,000 AVI tokens are bridged using SkyBridge.
AVI Token ULP Rewards: ((1,000,000 AVI x 1.0%) + (1,000,000 AVI x (1.0% x 1,500%)) = 160,000 AVI
Remaining Allocated AVI Liquidity Event Rewards: 9,840,000 AVI

Bridge AVI	1,000,000 AVI
LP Fee	0.0%
AVI Liquidity Provider Reward	1.0%
Liquidity Event Balance	10,000,000 AVI
Liquidity Event Modifier	1,500%
Available Rewards	160,000 AVI
AVI Liquidity Pool Size	100,000,000 AVI
Liquidity Providers in AVI	Rewards in AVI
10,000,000 AVI	16,000 AVI
25,000,000 AVI	40,000 AVI
30,000,000 AVI	48,000 AVI
35,000,000 AVI	56,000 AVI
Remaining AVI Rewards To Be Paid Out	9,840,000 AVI

Need help?

Questions on how Unalloyed Liquidity Works? Are you a project interested in utilizing SkyBridge to bring utility and holder rewards to your project? Please contact us in our Telegram or Discord communities for more info!