How to Earn MANA From Staking ICE-USDC Liquidity

How to Earn MANA From Staking ICE-USDC Liquidity

Following a passed Decentraland DAO proposal, Decentral Games received $1M USD in $MANA to incentivize the ICE-USDC liquidity pool on QuickSwap.

These incentives will assist in stabilizing the ICE Poker ecosystem as the DG team launches and scales ICE Poker SNG, along with other key initiatives to add additional direct utility to $ICE.

$MANA is Decentraland’s governance token that grants votes within their DAO. Community members can also use $MANA to buy Names, Wearables, Emotes, and $LAND on the Decentraland Marketplace.

Rewards will go live on July 1st at 00:01 UTC.

1,111,111 $MANA will be distributed from 00:01 UTC July 1st to October 14th. Liquidity providers will earn rewards based on their share of the liquidity pool.

This article breaks down what a liquidity pool is, how it works, and how to provide liquidity to the ICE-USDC pool.

What is a Liquidity Pool and Why Provide Liquidity?

First, what is liquidity?

Liquidity is how efficiently you can trade an asset.

A liquidity pool is a pool of tokens held in a smart contract. Decentralized exchanges (DEXes), such as QuickSwap, use liquidity pools to provide 24/7 permissionless trading. Liquidity pools rely on users to stake their tokens to provide liquidity.

  • More tokens staked = more liquidity
  • More liquidity = more efficient trading and stable prices

Users who stake their tokens are called liquidity providers. Liquidity providers earn a percentage of the trading fees and additional rewards.

The ICE-USDC liquidity pool on QuickSwap provides 24/7 trading to anyone who wants to buy and sell $ICE. This pool relies on users to provide liquidity by staking their $ICE tokens.

More $ICE liquidity leads to more:

  • Efficient trading
  • Stable prices
  • Usage of the $ICE token

$ICE liquidity providers earn a percentage of $ICE’s trading fees, and they can also earn additional $MANA rewards through Decentral Games’ ICE-USDC liquidity rewards program.

How Do Liquidity Pools Work?

A basic liquidity pool contains 2 tokens with a 50/50 ratio.

You need to stake equal values of both tokens to be a liquidity provider. After staking, you’ll receive a liquidity provider token (LP token). This LP token is a receipt of your deposit.

LP tokens are proof of ownership of your share of the pool. You’ll automatically earn trading fees based on your percentage of the pool.

For example:

The ICE-USDC liquidity pool contains 50% $ICE and 50% $USDC.

You need to stake equal values of $ICE and $USDC tokens. If you want to stake $100 of $ICE then you also need to stake $100 of $USDC.

After staking, you’ll receive an ICE-USDC LP token. This LP token represents your share of the pool and it’s how you earn trading fees.

QuickSwap takes a fee from every $ICE trade and automatically distributes it to everyone who staked their tokens in the pool. If your staked tokens equal 10% of the pool then you’ll earn 10% of the trading fees.

You can then stake your ICE-USDC LP token on the Decentral Games website to earn additional $MANA rewards.

Want to learn more? Here are some helpful resources for an in-depth explanation of how liquidity pools work:

Risks

Providing liquidity to earn trading fees and other rewards doesn’t come without any risks. You should evaluate these risks before staking your tokens.

Smart Contract Risk

Liquidity pools rely on smart contracts. Smart contracts can contain bugs or vulnerabilities leading to lost funds. While smart contracts are audited — it doesn’t guarantee that they’re 100% risk-free.

Impermanent Loss

Impermanent loss (IL) is the difference in value when comparing liquidity providing versus holding your tokens.

IL is a highly complex topic that requires more detail than we can provide in this article. Here are some helpful resources for an in-depth explanation of IL:

How to Provide Liquidity to the ICE-USDC Pool on QuickSwap

Step 1: Go to ICE-USDC liquidity pool on QuickSwap.

Step 2: Click Connect Wallet.

Step 3: Enter the amount of $ICE or $USDC you want to stake. The other field will automatically fill in.

You need to provide equal values of $ICE and $USDC.

Example: $100 of $ICE and $100 of $USDC.

You can swap $ICE for $USDC using QuickSwap’s Swap page.

Step 4: If this is your first time using QuickSwap then you’ll need to approve both tokens. This gives QuickSwap permission to access your tokens.

Click each Approve button and confirm the transactions in MetaMask.

Step 5: After approving both tokens, click Supply.

Step 6: A confirmation window will pop up with your transaction details. Click Confirm Supply.

Step 7: After your transaction is confirmed,  you’ll see your liquidity pool share at the bottom.

Step 7: After your transaction is confirmed,  you’ll see your liquidity pool share at the bottom.

How to Stake Your LP Tokens for $MANA Rewards

Step 1: Go to the DG Liquidity website.

Step 2: Connect your wallet on the Polygon Network.

Step 3: Stake your ICE-USDC LP token by clicking Max and Stake LP.

Step 4: You can unstake at any time by clicking Unstake.

How to Claim Your $MANA Rewards

You’ll start earning $MANA in real time immediately after staking your LP tokens. To claim your $MANA rewards:

Step 1: Go to the DG Liquidity website.

Step 2: Connect your wallet on the Polygon Network.

Step 3: Click Claim.

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