Earn as a liquidity provider
Last updated
Last updated
Megapot is building the world's largest jackpot. It’s unique because liquidity providers fund the initial jackpot like how they create a position on Uniswap. When players buy tickets, they pay fees to LPs, and these fees accrue to the position and grow the jackpot. They've run over $2M worth of lotteries now. Their team has worked at Uniswap, Lyft, and Microsoft.
Anyone can be a liquidity provider and earn insane APY on ETH/BLAST, in ETH/BLAST! This is just organic yield and does not include points.
The best analogy for a liquidity provider is you are the roulette table at the casino. The house's chips on the roulette table is your liquidity, so you pay out users who win and earn when users lose. The "house advantage", which happens when the ball lands on green, are the LP fees taken from every ticket sale. Similar to the roulette table, your LP position can be up or down on a given day, but fees should lead to a positive outcome over a long enough time period.
Provide liquidity which serves as the minimum guarantee for the lottery jackpot. Your liquidity will fluctuate based on lottery results.
Earn a 10-15% fee from the sale of every lottery ticket. We're targeting 150%+ APY on ETH/BLAST, in ETH/BLAST. This is dependent on enough players playing. We can increase fees to grow LP yields and provide enough incentives for KOLs to promote Megapot.
Early liquidity providers get more Megapoints, and the ability to deposit before we add a liquidity pool cap to keep fees high
Security is our top priority. Our smart contract is audited. Our team is doxxed and ex-Uniswap.
There is no lockup. You can edit or withdraw liquidity at any time, and it's processed at the next daily lottery run.
Let's assume you supply 4 ETH, contribute 1 ETH to the jackpot, and the initial jackpot is 20 ETH.
If 2 ETH of tickets is bought, via ~1k players each buying 2 tickets @ 0.001 ETH:
You earn 0.01 ETH per day or 292% APY from fees.
You have 90% chance to win 0.2 ETH, and 10% chance to lose 1.8 ETH.
If 20.1 ETH of tickets is bought, via ~2k players each buying 10 tickets @ 0.001 ETH:
You earn 0.1005 ETH per day or 4% per day from fees.
Since users bought more tickets than the initial jackpot, your liquidity position has no risk.
Here's our calculator spreadsheet. Change the numbers above to see how your yield and risk changes. DM us on Twitter (@megapot_io) or Farcaster (@pl) for a walkthrough.
Earn significant Megapoints when you deposit liquidity.
Megapot does not suffer from impermanent loss. The counterparty to your liquidity position is non-toxic flow. These are players who are willing to take a negative expected value bet, such that the fees over time should increase your position's value.
Megapot has variance. Your liquidity position can increase or decrease in value based on luck. To reward LPs for taking on variance, our target for fees (100%+ APY) is significantly higher than the returns one would usually get in an AMM with ETH. We can increase fees to grow LP yields and provide enough incentives for KOLs to promote Megapot and get more users.
Megapot is denominated in one currency and yield is also in that currency. Instead of holding both sides of a pool, and having your position change over time as prices change, Megapot lets you be long ETH/BLAST and earn best-in-class returns denominated entirely in ETH/BLAST.
Any other questions? Our team worked at Uniswap, so we're always happy to chat.
Our decentralized protocol optimizes for maximum jackpot size, and allocates fees between liquidity providers and referrers. If yield isn't high enough but we have many players, fees allocated to LPs will increase. This ensures that it's always lucrative to be a Megapot liquidity provider.