For Liquidity Providers

Liquidity providers are the foundation of Amara’s markets. By depositing assets into the protocol, they enable trading, earn fees, and gain exposure to a new class of synthetic sustainability markets. Amara offers two distinct models for liquidity providers, each with its own mechanics and incentives.

Perpetual Vault Liquidity On the perpetual side, liquidity is concentrated in a shared collateral vault.

• How it works: Providers deposit assets such as stablecoins, DIONE, or synthetic tokens into the Vault. These deposits act as collateral for leveraged trading.

• Revenue streams: LPs earn from multiple fee sources, including swap fees, funding fees, and liquidation penalties. Because fees are generated by trader activity, returns scale with market volume.

• Risk exposure: Providers share in the protocol’s profit and loss dynamics. If traders lose, the Vault captures their losses. If traders win, payouts come from the Vault. This model offers high yield potential but carries exposure to trader performance.

Spot AMM Liquidity On the spot side, AmaraSwap offers traditional AMM pools.

• Pair-based pools: Liquidity providers contribute two tokens into a pair, such as WDIONE/USDC.

• LP tokens: In return, they receive LP tokens representing their share of the pool, which can be redeemed at any time.

• Fee rewards: Each swap in the pool generates a fee, distributed proportionally among LPs.

• Lower exposure risk: Unlike the Vault, AMM pools do not directly carry trader PnL risk. Instead, LPs face impermanent loss if token prices move significantly.

Flexibility in Strategy By combining these models, Amara gives liquidity providers freedom to choose their level of risk and return.

• Providers seeking higher yield with more market exposure may opt for the Vault.

• Providers preferring a more predictable fee stream can use AMM pools.

• Some may split capital across both, diversifying exposure.

Sustainability Angle What makes Amara unique for liquidity providers is the integration of synthetic carbon credit assets. This introduces an additional revenue pathway: being among the first to provide liquidity for sustainability markets. As demand for these assets grows, early LPs stand to benefit from higher volumes and deeper fee capture.

Amara’s liquidity provider design is more than just a fee mechanism. It is a way for participants to align themselves with both financial returns and the long-term vision of building sustainable finance in DeFi.