Cryption Network, which is building a suite of crypto-friendly products, including staking and swapping for ordinary users, has launched Cross chain farming on Polygon.
Cryption Network Launches Cross-Chain Farming on Polygon
As per a post on September 9, the dApp is gasless and permits instant cross-chain yield farming, the first in the DeFi scene. According to the product creators, PolyDEX will allow ETH holders to farm on Polygon in a single transaction.
The Cryption Network team adds that cross-chain farming will be wholly decentralized, relying on ETH-Polygon bridges. Polygon is EVM-compatible and can easily link with Ethereum and other blockchains, inherently compatible with the pioneer smart contracting platform.
The development team is now leveraging this property to allow ETH holders to have the flexibility and benefit from both blockchains. In their arrangement, users can deposit ETH in Ethereum and yield farm on Polydex, earning LP tokens in a single click.
The POS Token Bridge uses a set of smart contracts which requires assets, in this case, ETH—but including NFTs–, to be initially mapped. After that, it would enable their trustless transfer of assets from Ethereum (the root chain) to Polygon (the child chain).
The POS Token Bridge is more flexible than the Plasma Bridge. While the latter offers a higher level of security and has a seven-day withdrawal period from Polygon to Ethereum, which may be an inconvenience.
Polydex also relies on the Data Bridge, which consists of the State Sync mechanism and FxPortals but requires asset mapping between the root and the child chains.
How PolyDEX Staking and Cross-Chain Farming Works
Polydex cross-chain yield farming first requires an initial deposit of ETH via popular browser wallets like MetaMask in Ethereum by specifying the farm the user wants to enroll in. On receipt, the smart contract processes and prepares cross-chain yield farming metadata.
Subsequently, this triggers the porting of ETH and processed metadata to Polygon via POS token bridge and FXPortals intermediator contracts. These intermediator contracts also decode metadata, allowing the trustless conversion of deposited and ported ETH to tokens. These tokens are used to supply liquidity, creating LP tokens. In turn, these LP tokens trigger the core PolyDEX core farming contract to deposit LP for the user.
PolyDEX Farms and Vesting Schedule
There are two types of farms in PolyDEX. Core Farms provide liquidity to frequently used tokens like ETH, MATIC, BTC, and stablecoins. On the other hand, the Multi Reward Farms are a special type of farms that distribute multi-reward tokens whenever a user supplies liquidity. Here, a user can deposit one token but, in turn, receives multiple rewards.
However, PolyDEX has stated that the sum of all APRs of individual reward tokens will be the total APR of the farm. Furthermore, 75 percent of the rewards will be sent to the Reward Manager and vested linearly for four months. The remainder is reimbursed to the user. Users who deliberately choose not to claim their rewards for more than four months, that is, after the vesting period has elapsed, are entitled to receive an extra 15 percent of PolyDEX’s CNT.
Single-Sided Liquidity Cushions against Impermanent Loss
In addition to offering cross-chain farming, PolyDEX’s ability to provide various types of farms gives users flexibility and options depending on their varying needs. However, according to the development team, the power of users to supply liquidity without exposure to impermanent loss through a single-click, single-sided liquidity appears to be their main selling point.
Their approach differs from Uniswap and other mainstream AMMs. In this model, users must deposit two or more tokens simultaneously to a pool to receive LP tokens. This exposes them to unprecedented market risks through opportunity costs arising from individual token’s price volatility.
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