LP Rewards is Over! But Fee Accumulation Isn't (Don't Pull Liquidity)

The LP Rewards Program is officially over.

But don’t rush to pull your liquidity!

Here’s why.

Summary of the LP Rewards Program

LP Rewards was a SMASHING success!

151.25 Billion LOAN tokens were distributed to the liquidity providers.

These liquidity providers helped the USDL:PLS pair on PulseX v2 to become:

• At its height, the 4th most liquid pair on all of the PulseChain.
• The second most liquid stablecoin on PulseChain behind Dai from Ethereum

But even though it’s over, and you won’t accrue LOAN rewards anymore, here is why you should not pull your liquidity.

Don’t Forget About the Fees

Since the LOAN token emissions were so outstanding, many liquidity providers forgot they were also earning trading fees on PulseX.

At the time of writing, 24h volume through the USDL:PLS pair on PulseX v2 was 2.4 million USD worth of either PLS or USDL.

If you apply the 0.22% trading fees earned by the LP, then you’ll find that liquidity providers earned a total of 5,280 USD worth of PLS and USDL in one day!

Game Theory

It is not unreasonable to assume that other users will pull their liquidity because they only wanted to accrue the LOAN token rewards.

This is great news for long term LPs, because they will receive a larger portion of the fees since they own a significantly higher portion of the liquidity pool.

 The Bottom Line

There will be no more LOAN token emissions to the liquidity providers on the USDL:PLS pair on PulseX v2.

However, it is not an unreasonable assumption that trading fees through PulseX for the LPs will ramp up because other liquidity will be pulled to make yield elsewhere.

Not to mention that volume across all of PulseChain has ramped up as well, resulting in increased fees for all LPs.