🤔Why Provide Liquidity?

Providing liquidity is cool and stuff - but why should you bother?

1. Earn Fees 💸

When setting up a market-making order on TensorSwap you can configure your own custom fees in the range of 0-25%.

That's 0-25% of the trade that goes into your pocket.

Obviously, orders with lower fees will be more competitive, so there's a golden middle to be struck. We think fees up to 5% are reasonable.

What about royalties?

Tensor has a (taker fee) buy now/sell now == pays royalties(if enforced) plus 1.5% fee (Maker)bidding/listing == no royalties plus 0.25% rebate .

If you're interested in why we went with this approach, read Fees & Royalties

How much you can make market-making? What happens if the price of the NFT falls/rises sharply? What are the risks? 🤔

Check out our detailed Market-Making Example for answers.

2. Earn Rewards ⭐️

Active traders on TensorSwap are rewarded with points that will later convert into Mysterious Tensorian boxes.

We're rewarding Market Makers with Tensor Points rewards! 🔥

As of today, creating "maker" orders (collection-wide bids, listing orders, market-making orders) earns tensor points for listing in the top 100 by 24-hour volume.

Hint: The closer your bid/listing is to the floor, the more points you will earn.

A ton more detail is available in Rewards.

3. Auto-manage your NFT Portfolio 💰

We all know what to do: buy low -- sell high. But damn is it hard to follow. Emotions get in the way when markets rally we don't want to sell when we should -- then they fall and we should be buying but we're first to sell.

The good news is that automated strategies on TensorSwap force you to buy low and sell high:

  • Collection-wide bids lower the price with each consecutive purchase you make

  • Listing orders up the price with each consecutive sale you make

  • Market-making orders are the best of both worlds: they both lower the price for purchases and up the price for sales, AND they make fees in the process 💸

This means your NFT portfolio will grow and shrink precisely at the right times.

  • When everyone is fearful and selling 😱 - you're accumulating

  • When everyone's greedy 🤑 - you're selling

You might have heard of dollar-cost averaging or "DCA" in the past. TensorSwap is EXACTLY that. You tell us how many NFTs you want to buy/sell, and our algorithms handle the rest, making sure you buy low & sell high.

BONUS: What about Staking? 🤔

One obvious question that comes up is: but what about staking? To provide liquidity on TensorSwap, you must remove your NFTs from any staking vaults. But that means you lose tokens/yield from those vaults! 😱

What do?

One way to think about it is as follows: well, what are the tokens that this NFT project is giving you actually worth?

  • If it's $DUST from DeGods - then A LOT, and you should probably keep your DeGods staked ✅

  • But for 99% of NFT projects, will their tokens really accumulate value? 🤔

By providing liquidity on TensorSwap you're earning:

  • ✅ Hard cold SOL for market-making

  • ✅ Rewards Points will convert into $Mysterious Tensorian boxes

The first point is really the strongest. It's very hard to argue that hard cold SOL is worse than some imaginary internet money someone else promises you (including us!). Remember: market-making pays you hard cold SOL ☀️, right into your wallet.

On whether Tensor Points and Mysterious Tensorian boxes will be worth more or less than another project's tokens - we'll leave that up to you. We don't have an opinion here. But at the very least it might be worth diversifying 😉

Ready to Provide Liquidity? 🚀

If the above convinced you to give TensorSwap a go, check out How to Provide Liquidity

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