Lyra Trial Liquidity Mining Program

Published on: 13.09.2021

Lyra announced the start of a trial liquidity mining program, designed to increase the supply of sUSD on OE and enable a better experience for Lyra’s traders and liquidity providers.

Since Lyra launched two weeks ago, over 3000 trades have been made on the $ETH market. This is a great sign that with the low fees enabled by Optimism, there is legitimate demand to trade options.

However, with only 500k liquidity available, the total volume available to trade is still very limited. So far they’ve dealt with this by limiting the maximum trade size in the dApp and setting high slippage on the market. As they build confidence in the system, it is important to move toward more realistic conditions. With most recent expiry, they lowered slippage and removed the trade limit, leading to the entire liquidity pool being exhausted in just 72 hours. In addition many traders have also struggled to acquire sUSD on OE without incurring substantial slippage.

Fundamentally, these issues arise because the supply of sUSD on OE is low – with only around 8M circulating – and the demand to trade on Lyra is high. Recall that Lyra relies on sUSD as both a source of liquidity and a means of exchange:

sUSD is the asset used by Lyra’s liquidity pools, providing the collateral for all options purchased.
sUSD is Lyra’s “quote asset”, which means all options purchased and sold require the exchange of sUSD.

🔸Lyra ETH Market Pool

Start: Friday 17 September 09:00 UTC

End: Friday 1 October 09:00 UTC

Amount: 375,000 $LYRA

Pool: TBA

This program is targeted at those interested in providing liquidity in Lyra’s ETH market. It begins 4 days after the Uniswap rewards, since it is necessary to first increase the supply of sUSD on OE. They will release a second post in the coming days which explains how to provide liquidity and become eligible for the rewards.