Equilibrium finance is a one-stop DeFi platform in Polkadot that offers user services like lending, borrowing, trading, insuring assets, and the opportunity to earn passive income. Equilibrium won the 12th parachain slot on Polkadot with 625,505 DOT worth $4,147,100 crowdloaned by members of the Equilibrium community. They have since launched and currently have a TVL of over $199,000.
EQ and EQD tokens
EQ is the native utility token for transaction fees and governance on Equilibrium.
EQD is the stablecoin of the Equilibrium Network collateralized by a weighted basket of assets. EQD can be minted using any of these assets:
- Wrapped Ethereum (WETH)
- USDC
- USDT
- DOT
- Liquid staked wrapped DOT on Equilibrium (eqDOT)
- Derivative of DOT crowdloaned on ParallelFi (cDOT)
- DOT derivative for crowdloans on Equilibrium and Genshiro (xDOT)
- Moonbeam’s Glimmer token (GLMR)
- Astar (ASTR)
- Parallel finance token (PARA)
- Interlay token (INTR)
- Interlay’s BTC (IBTC)
- Pendulum token (PEN), which is still in development.
EQD will offer users various opportunities to earn on Equilibrium and, with the recent partnership with the Ajuna network, will be utilized as an in-game currency on Ajuna. EQD will also be available as a stablecoin on the Pendulum, Astar, Bifrost, and Crust networks.
EQ Blast
Equilibrium finance recently announced the ‘EQ Blast Campaign,’ an event for bootstrapping liquidity on the Equilibrium network. Users participating in this campaign can earn over 90% yields on supported assets such as DOT, liquid DOT, stablecoins, and more.
There is a 12 billion supply of EQ tokens, with 10% earmarked for liquidity mining on Equilibrium. 1% of the total supply will be utilized in the EQ Blast campaign, expected to last four months or until all of the 1% is distributed.
Users can easily partake in this opportunity by using any supported tokens and following any of the strategies shared in this article. This article will share the best methods to earn the highest possible APR.
Before sharing these strategies, let’s quickly review the financial services available to users at Equilibrium.
- Lending assets: Users can deposit assets into the lending pool to provide liquidity for borrowers and earn a return on their deposit. Presently, only DOT and eqDOT can be deposited into the lending pool on Equilibrium.
- Borrowing assets: Users can borrow on Equilibrium by depositing any supported assets as collateral for their loans.
- Trade: Users can swap stablecoins on Equilibrium and trade other tokens using leverage as high as 20X.
- Insuring assets: Users can provide insurance for marginal traders and earn a certain percentage for their deposited assets. Deposited assets will serve as system safeguards and absorb liquidated collateral and debt.
Strategies to earn high on the EQ Blast
Stableswap Maximalist: This strategy provides an APR >94% for users. It involves some simple steps:
- Deposit DOT to Equilibrium,
- liquid stake DOT to the Equilibrium finance derivative eqDOT for 12% APR,
- use eqDOT as collateral to mint the stablecoin EQD,
- deposit USDC, which matches EQD in value, and add EQD-USDC liquidity to the stableswap pool for 10% APR,
- use the LP from the stableswap pool as collateral to mint more EQD at 5X leverage and repeat step ‘d’,
- add the LP from the stableswap pool to the insurance pool for 15% APR.
With this, rewards are generated from the liquid-staked DOT, the stableswap, and the insurance pool. Staking EQ for 24 months provides a multiplier of 3.4X, which takes the users earning APR above 90%. I used DOT in this example because of the liquid staking available. Other supported assets can be used to mint EQD and follow the outlined steps.
The farming guru: This strategy comes with less risk but offers slightly less APR. Staking EQ while utilizing this strategy can generate APRs of >90%. It involves these steps:
- Deposit DOT to Equilibrium,
- liquid stake DOT to the Equilibrium finance derivative eqDOT for 12% APR,
- use eqDOT as collateral to mint the stablecoin EQD,
- deposit USDC, which matches EQD in value, and add EQD-USDC liquidity to the stableswap pool for 10% APR,
- add the LP from the stableswap pool to the insurance pool for 15% APR.
Other supported assets can be used to mint EQD as well. Locking EQ for a minimum of one year provides a multiplier of 1.6X. Multipliers can go up to 3.4X for locking EQ for two years.
Cross-chain opportunities: This strategy involves utilizing EQ and EQD in farming pools on supported DEXs outside of Equilibrium. It involves these steps:
- Deposit DOT to Equilibrium,
- liquid stake DOT to the Equilibrium finance derivative eqDOT for 12% APR,
- use eqDOT as collateral to mint the stablecoin EQD,
- Utilize EQD and EQ for farming in dApps outside Equilibrium for 20–40% APR.
dApps outside of Equilibrium will give double rewards to stakers. These rewards will come in EQD and a token of choice by the dApp (likely the exchange token). Farms are yet to be announced on cross-chain dapps. However, a farm on Arthswap on the Astar network is expected soon.
Equilibrium users can also stake EQ to activate a multiplier on the aforementioned strategies. Staking EQ does not generate a return on investment but multiplies the APR of the user’s earnings up to 3.4X. The value of EQ tokens locked is the value of a user-earning portfolio covered by the multiplier. The more extended EQ tokens are locked for, the higher the multiplier a user receives. The maximum multiplier a user can receive is 3.4X, corresponding with a 24-month lock period for EQ tokens. Say Paul locks EQ worth $1000 on Equilibrium for 24 months. He then follows one of the strategies elucidated in this article and deposits $10000. The multiplier for his earning APR will be 3.4X, which will only cover $1000 worth of Paul’s deposits.
Users can employ other, more straightforward strategies, but these offer lower APRs. Users can deposit USDC on Equilibrium and put the USDC into the stableswap pool, deposit any supported asset on Equilibrium and provide liquidity on those assets, or use those assets to provide liquidity to the lending pool. The rewards are in EQ tokens and are paid out every eight hours with your staked assets locked for 6 months.
Equilibrium has seen a lot of activity recently. Some of these are the announcement of EQ Blast, the newly opened XCMP channels with the Ajuna network, and the partnership with Pendulum and Bifrost. The EQ Blast campaign is the first of many opportunities for users to enjoy high APRs while providing liquidity on Equilibrium. It is expected to last for four months, or until the 1% runway earmarked for the event is distributed.
Users looking to participate can start by creating or importing their wallets to the Talisman Wallet and visiting the Equilibrium website. Users with DOTs in their wallets can transfer these DOTs to Equilibrium by simply using the deposit tab in Equilibrium. Otherwise, DOT can be sourced from CEXs and then deposited on Equilibrium.
Contact or learn more about Equilibrium.
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