How to earn up to 100% annual returns on stablecoins without the risk of impermanent loss using Aqua Protocol, DeDust, and Ton Foundation.

5 min read4 days ago

What is Aqua Protocol?

Aqua Protocol is a new liquidity layer and borrowing (CDP) protocol on TON that mints its own decentralized stablecoin, AquaUSD, which is 200% over-collateralized by LST, LP, and RWA.

We launched Aqua Protocol with one main goal — to expand your opportunities in DeFi on TON, and to allow everyone to earn on their stablecoins without the fear of losing part of their capital due to impermanent loss. In this guide, I will explain how to mint AquaUSD and provide liquidity to the AquaUSD <-> USDT pair in order to start earning up to 100% annual returns through drops from Aqua, Ton Foundation, and by earning exchange fees on DeDust.

Step 1: Prepare USDT and AquaUSD.

To start earning, you will need two tokens — USDT and AquaUSD. But how do you get AquaUSD? There are two ways:

Buy AquaUSD on a decentralized exchange: This is simple, but it may not be profitable, especially if liquidity is still low, which can cause slippage. If you’re looking to buy a significant amount and can’t do it, contact t.me/julia_innovator.
Mint AquaUSD via Aqua Protocol: This is our main advantage! Minting AquaUSD is available to everyone, unlike USDT, which you have to buy or borrow through lending protocols.

Step 2: How to Mint AquaUSD

To mint AquaUSD, you need to deposit one of the supported assets as collateral. Here’s what you can use and how to obtain these tokens:

If you have TON:

stTON, tsTON, hTON: Deposit your TON into liquid staking to earn up to 5% yield on TON.
TON-SLP: Deposit TON into a pool on Storm Trade and earn up to 13% yield.
(SOON) LP-Dedust: Deposit TON into a pool on DeDust to earn up to 20% yield (in pairs like TON/USDT, stTON/USDT, tsTON/USDT).
(SOON) LP-StonFi: Deposit TON into a pool on StonFi (TON/USDT, stTON/USDT, tsTON/USDT).

If you have USDT:

USDT-SLP: Deposit USDT into a pool on Storm Trade to earn up to 20% yield on USDT.

You can deposit these tokens or liquid staking tokens into Aqua Protocol as collateral to mint AquaUSD.

Step 3: Deposit and Mint AquaUSD

Go to the application website.
Connect your Ton wallet.
Select a collateral asset.

4. DEPOSIT: Make a deposit.

5. MINT: Enter the amount of AquaUSD you want to mint (the minimum collateralization is 200%). Keep in mind that liquidation occurs if the collateral drops to 150%.

6. Sign the transaction to receive AquaUSD in your wallet.

That’s it! You’ve now successfully minted AquaUSD through Aqua Protocol.

Step 4: Provide Liquidity to the AquaUSD <-> USDT Pair

After minting AquaUSD, the next step is to provide liquidity by adding it along with USDT into the liquidity pool on DeDust and start earning.

We continuously add boosts to maintain high yields in the AquaUSD <-> USDT pair. This is your chance to earn a high percentage return on stablecoins without worrying about impermanent losses.

In addition to the boosts, you’ll earn from exchange fees generated from trades in the AquaUSD and USDT pair.

Moreover, we are participating in the Open League, and if you have Degen SBT and mint (instead of buying on the market) AquaUSD, you may potentially receive a drop from Ton Foundation in TONcoin.

Rewards and AquaXP Distribution

At launch, we plan to distribute up to 5 billion AquaXP over the course of 8 weeks. Rewards will depend on the size of the liquidity in the pool.

Now you’re ready!

Mint AquaUSD, add liquidity, and maximize your earnings on stablecoins.

FAQ:

Why is there no impermanent loss?
Our pool consists of two stablecoins (AquaUSD and USDT), which have stable prices. Therefore, there is no risk of losses due to price fluctuations.

Why is the yield so high?
The yield comes from trading fees (0.05%), AquaXP boosts, and potential bonuses for increasing TVL. Such high boosts are possible only at the beginning, before TVL grows to hundreds of millions of dollars.

How does AquaUSD maintain its $1 peg?
AquaUSD can always be redeemed at $1 through the Redeem mechanism if the peg drops below $1. The stablecoin is always backed by collateral worth more than 150%.

How do I withdraw my deposit?
Repay the AquaUSD debt (that you minted) and withdraw your collateral through the Repay and Withdraw functions.

How much is in the pool, and what is the target?
The current amount can be seen on DeDust. Our goal is to increase TVL to $30M within 2 months.

Where can I trade AquaUSD and AquaXP?
AquaXP is available on xRocket, will soon be on the DeDust DEX, and can be staked on Jvault.

What happens if the value of the collateral decreases when minting AquaUSD?
Monitor your collateral levels. If it drops to 150%, liquidation will occur. You can add more collateral, repay the debt fully or partially. It’s best to maintain a collateralization ratio above 200%.

For full technical details and example calculations, check the documentation.

Risks:

Liquidation: If the collateral drops below 150%, your assets may be liquidated.
Slippage: Low liquidity can lead to losses during swaps, although the protocol’s algorithms will work to maintain the peg where 1 AquaUSD = 1 USDT.
Maintaining collateral: You need to monitor the price of collateral assets to avoid liquidation and penalties.
Changing yields: Initial boosts may decrease as TVL grows.
Smart contract hacks: While Aqua Protocol has undergone two independent security audits, the risk of vulnerabilities remains. The protocol plans to continue audits.
Collateral asset risks: The value and reliability of collateral assets may fluctuate.

Evaluate the risks before using the protocol. DYOR (Do Your Own Research).

Follow our official announcements on these platforms:

Telegram Channel: @aquaprotocolxyzchannel
Telegram Bot: @aquaprotocolxyz_bot
Twitter: @aquaprotocolxyz
YouTube: @AquaProtocol
Website: aquaprotocol.xyz