Note: Clipper's liquidity pools are no longer explicitly capped. This article will remain as it was originally published for the sake of transparency, but note that the most accurate and up-to-date explanation of how Clipper’s liquidity pools work can be found here.
Clipper’s LP fee APR weighed in at a whopping 71.2% as of June 15th, 2022, roughly 5x higher than that of other leading DEXs like Uniswap (13.1% APR) and 16x more than Sushiswap (4.4%) according to TokenTerminal.com. In fact, over $900,000 in liquidity fees have been paid out by Clipper in the past 30 days alone ($$ annualized), making Clipper not only the go-to DEX for the lowest trading costs, but also an attractive destination for liquidity providers.
The best part is these fees make sense. They are organic yields off of a pool with exposure to major coins like WBTC, ETH and Stables, not inflated ponzi yields from speculative protocol tokens or on pools with risky long-tail altcoin assets. That makes Clipper’s yields genuinely desirable. In comparison, lending yields on Compound are only 0.06% for ETH, 0.34% for USDC, and 0.03% for WBTC.
DEX Profitability Comparison
Source: TokenTerminal, June 15, 2022
Clipper accomplishes this because it caps TVL. It can serve an essentially unlimited amount of trade volume with this small pool, making it incredibly capital efficient. Already, Clipper regularly turns over its liquidity pool several times per day (Volume / TVL). This means trading fees can add up to high yields very quickly for Clipper’s liquidity providers when only $15M of TVL is allowed into the pool.
Who Gets More LP Allocation?
Naturally, this begs the question: which Clipper users can get an additional LP allocation? Everyone wants 70%+ yields. In most DEXs, retail subsidizes whales by paying high fees to subsidize surplus TVL. By contrast, Clipper was founded on the belief that whales should subsidize retail. That’s why Clipper has capped the amount any one individual can contribute to the pool to ensure as many members of the community as possible can reap its rewards, instead of just a few whales.
And now we’re announcing another liquidity provision opportunity that rewards our community members. With the launch of Clipper’s LP Farming Program, valued community members with more capital will soon be able to get a bigger LP allocation by applying to become a Farmer!
Clipper’s LP Farming Program
With the launch of Clipper’s LP Farming Program, liquidity providers will be able to deposit more into Clipper's main liquidity pool to generate even more fees.
In exchange for these higher contribution limits, Farmers must donate a share of their fees to AdmiralDAO. At 70% yields, there is plenty of extra to go around such that everyone is happy. These fees will help fund the DAO and ensure Clipper can continue developing its community and providing the lowest trading prices possible for retail traders.
It’s a win-win relationship.
Join Clipper’s LP Farming Program
Clipper's Farming Program is open to any Clipper user who wants to whitelist and participate. Deposit as a Farmer here!