Starting this week, we will be rolling out an alpha test of Sorbetto Limone, our multi-chain optimizer that helps you maximize and multiply your returns from LP, without the need to worry about migration.
There are three key reasons why you should stake your LP through Limone.
- We offer the cheapest leverage in all of DeFi, using your LP tokens as collateral. This will allow you to multiply yields earned from rewards and fees
- Low auto-compounding fees, so you can automate your harvests in a tax-advantaged way.
- Because Limone can move your assets across DEXs, you can take advantage of the highest available yield across multiple DEXs as new farms emerge, without the need of monitoring or paying additional gas fees!
How does Limone work?
Step 1 — Users can deposit assets into a strategy via the Limone guided flow
Step 2 — Popsicle takes these assets and creates LP tokens on a specific DEX (e.g., TraderJoe)
Step 3 (optional) — Users can opt to use these LP tokens as collateral to create a leveraged position. If selected, Limone would borrow MIMs and use those to buy more LP tokens.
Step 4 — Popsicle will regularly autocompound rewards and fees back into your LP position.
Note that adding leverage to your Limone position (Step 3) is completely optional. As always, with leverage, there are liquidation risks in the event that your LP tokens drop in value. If you indeed choose to add leverage, it is very important that you track your investment and monitor how close you are from liquidation in order to avoid unpleasant surprises!
If your position is liquidatable, a third party can choose to pay off your debt in exchange for your collateral plus a liquidation fee. In the event that you are only partially liquidated, you will be able to withdraw any remaining LP tokens. For more detailed information about Limone, please see our documentation.
We currently need to be conservative with the amount of MIM available to leverage through Limone because of the low MIM liquidity available on sidechains, but as time progresses and more liquidity is added, we expect to increase those limits to follow market demand!
Limone generates a new stream of fees for Popsicle, which will ultimately be used to buy back ICE to be distributed to nICE stakers.
Management fees will be set to 5% for all yields automatically collected by Limone. As we introduce more pools and chains, we expect staked TVL to increase, and these management fees to grow proportionally.
Note that lending fees, which may include one-time borrow fees upon opening the loan and/or interest fees that accrue over time, will be paid to the Abracadabra Treasury, in order to be able to use their cauldron technology. These fees will vary from pair to pair and detailed information can be found on the leverage page, as well as on Abracadabra documentation here.
If you are interested in using the leverage aspect of Limone, make sure to read Abracadabra docs, as they will give you a better understanding of how those lending markets work.
There are more good things to come for Limone! We are starting on Avalanche, but we have plans to expand Limone to more pairs and more chains in the near future. Our team is already working on the first stable-stable pools, that will be most appropriate for users who wish to have delta neutral strategies!
In addition to these new Limone Pools coming soon, we will also be focusing on implementing our JIT engine on Fragola pools, in order to make them perform better in the current market conditions. Expect more news about this coming in an upcoming medium article.
Lastly, in the next few weeks we will be working on updating the current ICE emissions and tokenomics! Stay tuned!