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Protection Liquidity

This page describes how to provide liquidity.
As a liquidity provider you are taking on risk of paying protection contracts should they be exercised. You may lose up to all of your capital. Do not provide more than you are comfortable losing.

Requirements

  1. 1.
    Metamask installed
  2. 2.
    USDC for purchasing C-OP
  3. 3.
    ETH for paying gas fees

Providing Liquidity

We start with the launching page of UNION Protection, where users can purchase protection, add liquidity (sell protection), and claim protection. The app can be found at:
Click into Protection Seller tile to access the Seller’s Dashboard. The dashboard presents users with overview of overall protection market and a section of your liquidity added, if any.
From the dashboard, users can add liquidity, manage liquidity, and get overall UNION protection stats.
Click on "Add Liquidity" to access the Liquidity Marketplace. From here, click on the relevant protection tile you want to add liquidity to.
After selecting the pool, you will be presented with the Add Liquidity modal. Enter the amount you want to deposit or click on Max to deposit the max amount of collateral you have in your wallet.
  1. 1.
    The Deposit APY is an indicated metric based on the trailing 15 days premiums and liquidity in pool. It is not a guarantee of future returns. Premiums are paid in the same cryptocurrency as the liquidity cryptocurrency.
  2. 2.
    The Staked amount shows total liquidity provided in the pool.
  3. 3.
    The MCR is the Minimum Capital Requirement of the pool. It represents the funds locked to support active protection contracts in the pool. The MCR threshold ensures pool solvency to meet at least 85% of claims over a given year.
Click on Add to confirm adding liquidity. If this is your first adding liquidity to the pool, you will be prompted to approve two transactions in Metamask:
  1. 1.
    Approval to spend the USDC.
  2. 2.
    Adding liquidity.
These two approvals will always be sequential. Once the transactions have been completed, you will be taken back to the "Add Liquidity" dashboard where you will see your liquidity positions under "My Liquidity". If you have added liquidity previously, you will only need to approve the liquidity adding transaction.
You can also see your pUNN token as an ERC-20 in Etherscan. Note: below is the pUNN for C-OP in Rinkeby Testnet. Your actual pUNN token address may be different.

Removing Liquidity

To remove liquidity, go to the Add Liquidity dashboard and click on the Withdraw button under My Liquidity for the liquidity you wish to claim.
In the Remove Liquidity window enter the amount of liquidity you wish to remove. You can only remove the Available amount.
  1. 1.
    The Deposit APY is an estimate metric based on trailing 15 days premiums. Your actual APY may be different based on how long you have been in the pool.
  2. 2.
    The Available amount shows the amount of liquidity you can withdraw at this time.
  3. 3.
    Pending Premiums shows your share of the liquidity premiums earned that have not yet been distributed. Premiums are distributed periodically to liquidity providers by UNION. The time counter the Pending Premium amount shows time until the next automatic distribution. You can withdraw liquidity with your premium before the next distribution but you may have to pay a higher gas fee.
  4. 4.
    The Locked amount shows two amounts: the locked Premiums and Locked Liquidity. Locked premiums are premiums for policies which are still active. If a policy expires without being claimed, these premiums will be distributed. Locked Liquidity shows your liquidity locked due to last deposit. Withdrawals are locked for a period after a deposit to ensure fair risk / reward distribution for liquidity providers. This period is variable and can be changed due to incentive periods or by governance. You can not remove these amounts until they are unlocked, at which point they will automatically be moved to Available.
Click on "Remove" to remove liquidity. You will be prompted once to confirm the transaction and then be taken back to Add Liquidity dashboard.
Last modified 1yr ago