How to Add/Remove Liquidity
Lending in Collar is a swap between a lender's assets (WANT tokens) and a borrower's COLL tokens. COLL tokens give the lender the right to collect the repaid loan or the defaulted collateral after the expiry of the loan, or they can be swapped back to WANT before expiry to exit the loan early.
This swap is facilitated by Collar's custom designed AMM (intro to AMMs). The liquidity (tokens) that make the swap possible are provided by lenders who are rewarded with COLLAR governance tokens. With Collar, liquidity providers do not need to be concerned with trade volume, as they do not rely on swap fees for rewards. In addition, impermanent loss is not a large concern for liquidity providers, as all AMMs in Collar (so far) are for WANT stablecoin/COLL stablecoin pairs.
To provide liquidity to Collar, you can deposit WANT tokens, COLL tokens, or a combination of the 2 in any proportion. Your deposit will automatically be exchanged to a proportion of WANT and COLL tokens that reflects the balance state of the liquidity pool at the time of the deposit. You will receive interest on the proportion of your COLL tokens in the pool for the duration of time you supply liquidity; this interest will be obtained when you withdraw liquidity and exit your position by selling the COLL tokens, or by collecting the assets underlying the COLL tokens when the loan expires. You will also accrue COLLAR governance token rewards, which can be claimed at any time.
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Adding Liquidity Steps
Step 1: Go to collar.org and enter the app. Step 2: Connect your wallet to Collar (make sure your wallet is set to the Ethereum Mainnet and you have some ETH to cover gas fees). Step 3: On the "FARM" tab, select the "Deposit" page. Then use the "Pair Selector" to choose the collateral that will secure the loan (COLL) and your asset to provide (WANT). Step 4: Make a note of the "Expiry" of the loan. This is the date after which you can collect on the loan (redeem COLL tokens for assets). You can use the "NewRound" toggle to switch to a later expiry date if you wish. Step 5: If they are not yet approved, click "Approve" and approve your tokens for trading. Step 6: Enter the amount of WANT tokens you wish to deposit and/or the amount of COLL tokens you wish to deposit, or click "MAX". Step 7: Once you are ready, click "Deposit". Step 8: Once the transaction is complete, you will receive your CLPT (Collar Pool Tokens) and you can view them in the Collar dashboard. You can view the details of all your liquidity provisions by going to the Collar app menu and entering "MyPage".
When you provide liquidity, you will continually accrue COLLAR token rewards in accordance with the quoted APY, but note that this rate will fluctuate over time as the supply, demand, and TVL change.
Your CLPT represents your total share of the pool and can be used to withdraw your deposited assets at any time, although the proportion of WANT tokens and COLL tokens you receive will reflect the balance state of the pool at the time of withdrawal.
Removing Liquidity Steps
Step 1: Go to collar.org and enter the app. Step 2: Connect your wallet to Collar (make sure your wallet is set to the Ethereum Mainnet and you have some ETH to cover gas fees). Step 3: On the "FARM" tab, select the "Withdraw" page. Then use the "Pair Selector" to choose the collateral that secures your loan (COLL) and the asset you provided (WANT). Step 4: Enter the amount of CLPT tokens to use to withdraw or click "MAX". The amounts of WANT tokens and COLL tokens you will receive will be shown. Step 5: Once you are ready, click "Withdraw & Claim" to withdraw and also claim all your earned COLLAR tokens, or click "Withdraw" to withdraw only. Step 6: Once the transaction is complete, you will receive your WANT tokens and COLLAR tokens in your wallet automatically. You will also receive your COLL tokens and you can view them in the Collar dashboard.
Once you have removed your liquidity, you can swap the COLL tokens back to WANT tokens by following the Exit Steps (if before loan expiry) or you can swap the COLL tokens to WANT tokens/BOND tokens by following the Collect Steps (if after loan expiry) on the How to Lend, Exit, and Collect page.
Claiming COLLAR LP Rewards Steps
Step 1: Go to collar.org and enter the app. Step 2: Connect your wallet to Collar (make sure your wallet is set to the Ethereum Mainnet and you have some ETH to cover gas fees). Step 3: In the app menu, enter "MyPage". Step 4: On this page you can view all of your claimable COLLAR. Find the pool you wish to claim your COLLAR from and click "Claim". Step 5: Once the transaction is complete, you will receive your COLLAR tokens in your wallet automatically.
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