Entropy
Search…
Liquidity Module
An overview of the Liquidity Staking Pool
2.50% of the initial token supply (25,000,000 ENT) will be distributed to users staking USDC to the liquidity staking pool.
Objectives
  • Allocate capital to top-performing liquidity providers to increase spread, depth, and uptime on Entropy.
  • Incentivize the allocation of USDC for market-making purposes on the Entropy protocol.

Staking Overview

Liquidity is a core component of any successful exchange. To promote liquidity network effects and incentivize professional liquidity providers, Entropy will be distributed to users who stake USDC to the liquidity staking pool. Community-approved liquidity providers will use the staked USDC to make markets on the Entropy Protocol, furthering the liquidity available across the markets. Liquidity providers are restricted from using borrowed funds outside of the Entropy Protocol.
Stakers will earn ENT rewards for staking USDC. ENT rewards will be distributed continuously according to each staker’s portion of the total USDC in the pool.
Each staker and liquidity provider is required to become party to the Revolving Credit Agreement. The agreement puts into natural language the terms of the liquidity staking pool to give each staker an enforceable right against any liquidity provider who does not repay the borrowed USDC. The agreement is only between each staker and each liquidity provider. The Entropy Foundation is not a party to the agreement and has no rights or obligations under it.

USDC Unstaking & Withdrawals

A staker must request to withdraw USDC at least 14 days (Blackout Window) before the end of an epoch in order to be able to withdraw the staker's USDC after the end of that epoch. If stakers do not request to withdraw, their staked USDC is rolled over into the next epoch.
Withdrawals cannot be requested during the Blackout Window.

Staking Risks

Borrowers from the pool are not required to lock collateral. All borrowers are professional and reputable liquidity providers. The list of allowed borrowers and their pool allocations are updatable by governance.
When users request to withdraw USDC, a borrower’s allocated balance for the next epoch may drop below the borrower's currently borrowed amount. In this situation, the borrower is responsible for paying back the difference between its borrowed and allocated balances before the end of the epoch.
If a borrower fails to repay an owed balance back to the pool by the end of the epoch, it is considered to be in default and is disallowed from borrowing further USDC until the debt is repaid. Stakers may lose USDC in the event a borrower never repays a debt. Stakers can lose a portion of staked USDC if a market maker were to lose USDC and be unable to replenish the liquidity staking pool.
Stakers also are exposed to smart contract risk if there is a vulnerability in the underlying smart contract code. All Entropy & governance smart contracts have been audited and rigorously tested.
To reduce the risk to stakers, each staker and liquidity provider will be required to become party to the Revolving Credit Agreement, but entering into the agreement does not ensure that a liquidity provider will repay all amounts borrowed, even if a staker's rights under the agreement are enforced.