Time to Bootstrap Some Marginly Liquidity

It’s time to bootstrap some DeFi liquidity. Marginly is the leverage-as-a-service protocol that’s launching one-click leverage on yield-bearing assets, and the protocol needs liquidity. That’s great news for you, especially if you like getting airdrops.

Marginly creates isolated side pools to existing automated market maker pools, enabling lenders to deposit their crypto—specifically ETH, USDC, and USDT—to earn a substantial yield. By providing liquidity, you enable leveraged yield farmers to post margin and then borrow from these pools to gain their desired leverage and respective APY boost. Marginly wants to collaborate with you—yes, you—to generate liquidity for these new pools.

So let’s start with the liquidity pools for Pendle-based Principal Tokens (PTs). Pendle is a sizzling DeFi protocol that enables the tokenization and trading of future yield. If you’re already staking your USDC or USDT or ETH—providing liquidity on Marginly is probably more interesting, and more financially rewarding too.

Wrap your head around the way that Marginly is bootstrapping liquidity 👇

What’s liquidity bootstrapping?

Marginly needs liquidity, organized in pools, to enable leveraged yield farmers to borrow. We’re bootstrapping that liquidity by offering special incentives to liquidity providers—LPs—during a Liquidity Bootstrap Event.

What kinds of special incentives? 

• Interest: Marginly pays you up to 65% in interest for ETH, USDC, and USDT.
• Sparks: Akin to points in a video game arcade, Sparks make you eligible to participate in the future Marginly token airdrop.

Earning Sparks is a core feature of the early Marginly experience. We’re adding to the excitement during the Liquidity Bootstrap Event by doubling the daily Sparks awarded to liquidity providers.

Providing liquidity to Marginly during the Liquidity Bootstrap Event should spark joy—that’s why Marginly is making it possible to load up on Sparks during this three-week event. Which, by the way, starts on May 15!

Why provide liquidity to Marginly

Lots of DeFi protocols can benefit from liquidity, so why should you choose Marginly? You want a protocol that takes security seriously, and we want you to sleep well at night. So first let’s cover the safety features of Marginly—

• No impermanent loss because LPs provide only single-sided liquidity
• Liquidity pools are isolated to minimize your exposure to risk
• The platform is 100% decentralized—non-custodial and with no reliance on off-chain oracles 
• Smart contracts are double audited by the cybersecurity OG Quantstamp

More great reasons to be a liquidity provider for Marginly 👇

Earn interest

Marginly pays high interest rates in the same currency that you provide for liquidity. Everyone loves passive income, which you can generate with Marginly.

Earn Sparks

You always get Sparks for providing liquidity, with the daily amount doubled during the Liquidity Bootstrap Event. 

Get the Marginly airdrop

Liquidity providers earn Sparks—and Sparks are what make you eligible to receive part of the Marginly airdrop. Marginly is distributing airdrop tokens to all participants in the Liquidity Bootstrap Event.

Refer friends and get even more Sparks

Marginly is supporting a two-tier referral system that enables you to add to your Sparks tally. You get the equivalent of 10% of the Sparks earned by your referrals and 5% of the Sparks earned by the referrals of your referrals. Invite all your friends to earn so many additional Sparks! 

How Marginly mitigates risks for LPs

Providing liquidity to any DeFi protocol creates risks for the LP. That’s unavoidable—but can be mitigated if you understand the risks. Marginly takes all possible measures to avoid or largely eliminate the typical risks for liquidity providers. 

Liquidity provisioning risk. There’s always risk associated with providing liquidity in pools for others. Similar to any other lending protocol—if assets are heavily borrowed, the funds available to the LP at the pool’s maturity date may be insufficient. The same with Marginly—the lender may be unable to recoup their position if borrowers don’t close their positions upon the pool reaching maturity. 

Marginly mitigates this risk by giving farmers two weeks after the pool’s maturity date until the borrower is automatically liquidated. In the event of an automatic liquidation, the liquidity provider recoups their original position and additional collateral from the farmers.

Smart contract risk. Although using smart contracts is often secure, they are not risk-free. All smart contracts can potentially be hacked or exploited.

This risk is mitigated, if not eliminated entirely, because Marginly’s smart contracts have been double-audited by Quantstamp. Recently, too—the last one was completed in May 2024. Marginly has used the same tech to operate several liquidity pools in Arbitrum since November 2023.

What’s ahead for Marginly

Marginly will commence its support for leveraged yield farming on May 29, before the Liquidity Bootstrap Event ends on June 5. Farming with Marginly will enable users to earn attractive APYs and plenty of  Sparks.

Fast forward—and the Marginly airdrop is slated to happen. Everyone who makes the Liquidity Bootstrap Event a success or becomes a Marginly farmer will get part of the airdrop, to be doled out in proportion to your Sparks.