Liquid Staking Tokens (LST)
Explore the benefits of using TONCO DEX for earning additional yield on LSTs
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Explore the benefits of using TONCO DEX for earning additional yield on LSTs
Last updated
Liquid Staking Tokens (LSTs), like stTON from bemo, represent the value of your staked assets (TON) but are portable and accessible, allowing you to use them in DeFi protocols like TONCO DEX to earn additional yield while still receiving staking rewards.
On TONCO DEX, you can provide liquidity with LSTs in a concentrated liquidity pool. This means you can target specific price ranges, maximizing your capital efficiency and earning more trading fees compared to traditional V2 pools on other DEXes like STONfi and DeDust.
In a V2 pool, liquidity is spread across the entire price range from 0 to ∞, but with TONCO’s concentrated liquidity, you can set a narrow range around the current price, ensuring more of your liquidity is used for trades, resulting in higher trading fees and a higher APR.
stTON is a reward-bearing token, that represents your staked TON, including returns from staking. As staking rewards are received, stTON increases in value, without any change to the quantity of tokens.
For example, if the current price of stTON is 1.2 TON and the net staking yield is 5% per year, after one year, 1 stTON will be worth 1.26 TON (1.2 + 0.06)
stTON is fully backed by the staking pool, consisting of TON tokens participating in validation. This ensures there is no risk of a depeg, meaning the price deviation from its fundamental value is eliminated. This makes concentrated liquidity especially effective for the stTON/TON pair, where you can confidently set a narrow range around the current price to maximize capital efficiency.
Average APR on TONCO LST pools is about 10x greater than on the traditional V2 DEXes
With stTON being a yield-bearing token that grows in value, its price is directly linked to TON. By setting a narrow price range around the current price, you ensure that more of your liquidity is active in trades:
This approach leads to higher trading commissions and a higher APR compared to V2 DEXs.
Price range represents the price window where liquidity is concentrated and trades are executed. If the price moves outside the selected range, the position stops earning fees and becomes inactive.
— Use the presets or manually set minimum and maximum prices according to your strategy.
— A smaller range offers higher yield but higher risk of the price moving outside the selected range.
— The closer your range is to one side of the market price, the more of that specific asset you’ll provide.
When choosing a price range, consider how much you expect the prices to fluctuate while holding your position. Also, think about how much time and effort you’re willing to spend managing your position as market conditions change, and be aware of any network fees associated with making adjustments
Single-sided liquidity
Single-sided liquidity on TONCO is a powerful feature that lets you allocate liquidity on one side of the market, either above or below the current spot price, depending on your strategy.
With this option you can apply a range order strategy. A range order is like setting a limit order but with an added advantage—you earn fees instead of paying them. This strategy works well with volatile/stable asset pairs (like stTON/USDT).
When you want to sell, input single-sided liquidity in the volatile asset (stTON). If the price rises above your set range, your assets will convert to the stable asset (USDT), and you can exit (close your position):
For buying stTON at a specific price, reverse the process: use single-sided liquidity in the stable asset, and set your buying range. When the price drops below your range, your assets convert to the volatile asset (stTON), allowing you to exit:
This flexibility, combined with concentrated liquidity, maximizes your capital efficiency and earnings potential. Explore the detailed strategies in the following pages and check out our guide on hedging risks by using EVAA lending platform.
Creating a pool for any token paired with stTON is highly profitable on TONCO. The reason? The value of stTON is tied to TON, and it grows with the staking APY (3.47% as of December 27th).
You benefit from the consistent increase in stTON’s value as it reflects the staking returns of TON. This means higher capital efficiency and increased yield for liquidity providers.
By choosing a token/stTON pair instead of token/TON when creating a pool, liquidity providers can earn additional income without taking on new risks.
At TONCO, we offer free token listing and additional listing bonuses. We’ll guide you in placing liquidity efficiently to maximize your returns. Fill out the form to connect with us.
— TONCO ensures minimal price impact, allowing you to trade large volumes of LSTs with almost zero slippage due to its concentrated liquidity in narrow price ranges.
— TONCO significantly reduces impermanent loss for stTON/TON pair, making it a safer and more profitable choice. Concentrated liquidity offers a more secure environment by maintaining stable asset values, protecting LPs from market volatility.
— High trading volumes due to low slippage result in higher fee earnings for liquidity providers, making it an attractive option for both traders and LPs.
