Cropper Introduces Liquidity Mining 2.0 in Partnership with PsyOption
Last month marked the final unlock of $CRP tokens for Cropper’s seed and private investors. With these tokens now liberated, our team has been brainstorming new strategies for $CRP liquidity building and incentivization schemes.
With the goal to reduce the emission of our native token to a minimum while still ensuring positive user benefits and a fair swapping price, we came across the perfect solution: options.
Starting July 7th, 2022, we are thrilled to announce that the rewards on the $CRP-$SOL pair will be in form of options ! The options are as follows:
- The American style, which means the option can be exercised at any moment;
- Price strike of 50% of the $CRP token price at the start of the farm meaning you can earn the option that gives you the ability to buy $CRP at a 50% discount. You can then both stake the tokens (which gives you access to IDO tiers at a discounted price) or directly sell them to make a x2 on your investment;
- Lastly, a 3 months expiry.
These options are powered by PsyOptions, the decentralized protocol offering completely trustless American-style options.
By releasing this we plan to improve the standard liquidity mining model which works by distributing tokens in return for providing liquidity on the platform. This standard model of liquidity mining works great to bootstrap liquidity, but the drawback is that this attracts lots of mercenary capital that only comes to the platform to farm and dump tokens. When the token price goes down and incentives end, mercenary capital leaves as well.
With Liquidity Mining 2.0, call options are rewarded instead of tokens. Call options must be exercised in order to claim the CRP.
This initiative’s key advantages are a better alignment with liquidity providers’ incentives and a reduction in farming-and-dumping, since the token price must be above the strike price in order for holders to profit. This capital can then be used for protocol-owned liquidity or various other initiatives.
For easy participation, our team has found a way to implement the PsyOptions features directly onto the Cropper Finance app. This way, users can benefit from options through a familiar and single platform.
To exercise an option, please follow the tutorial below:
First, you will need to harvest your options on the farm. To do so, visit the Farm tab and find the label “Options”.
Once you’ve claimed your $oCROP (option CRP), a banner will appear at the top of the page showing that you have an option to be exercised, as indicated below.
To exercise your option, select “Exercise”. A popup will appear allowing you to exercise your option.
In the example shown above, you can see the user has 2000 $oCRP to be exercised which will allow them to buy $CRP at a price of 0.005 $USDC/$CRP. By exercising this option, the user will receive 2000 $CRP for the value of 30 $USDC in exchange for 2000 $oCRP and 10 $USDC. That means making a profit of 200%.
Cropper stands by spreading sustainable features and helping the growth of projects in the blockchain ecosystem. With that being said, we will be offering this options feature to any project wishing to incentivize liquidity mining in a more sustainable way through options. Feel free to contact our team on Twitter if your project is interested in taking part!
PsyOptions aims to bring a TradFi feel to DeFi by building a decentralized, permissionless, and community-owned financial services platform. Our vision is to not only provide our users with a decentralized options trading platform, but to become the de facto on-chain financial services platform for DeFi users across the globe. Our initial options protocols are simply the first step along the path of building towards this goal.