Sorbetto Limone
Your guide to learning how to use Sorbetto Limone!
Using Sorbetto Limone
UI Sorbetto Limone is currently offered on Avalanche, however, the product will grow to support pools on other chains shortly.
On the Limone opportunities page, you will see a list of pools that you can enter along with the current APR and available MIMs that can be used for adding leverage to LP positions.
Opening a Position
When you click on the "Join" button, you will be brought to our LP UI which will guide you through the process of joining a Limone pool.
The first step in the process allows you to select which assets you want to use to join the position. Using the example above there are 3 options to add liquidity to the AVAX / USDC.e pair:
Provide equal dollar value of both assets. You can do this by selecting both tokens that make up the LP, in this case, USDC.e and AVAX.
Provide one of the assets that make up the LP. Popsicle will then automatically exchange half of the provided asset for the missing asset and join Limone all in one transaction! You can do this by selecting either USDC.e or AVAX.
Provide one of our “zappable” assets. Popsicle will then exchange that token for equal dollar value of the two pool assets and join Limone! You can do this by selecting "Use Other Tokens." While Popsicle does not charge a fee for zapping tokens into a pool, it should be noted that zap transactions involve a higher gas cost as well as slippage, which could be significant when zapping large amounts of tokens.
Joining using “zappable” assets:
First, select the asset you wish to exchange for PLP by either typing its name or pasting the token contract address. Then specify the amount you wish to exchange.
The UI will automatically compute how many PLPs you will get, how much they are worth, and the expected amounts of the pool assets you will receive. You can click on "Settings" to adjust slippage tolerance and transaction speed.
Slippage, in simple terms, is the loss that occurs while exchanging one token for another. This is usually caused by the size of the swap relative to the amount of liquidity on the AMM.
Please note that you might get a lower PLP value than the value of the token you are swapping, because of slippage and price impact. Keep this in mind if you are using low liquidity tokens to join! Make sure to save before closing the "Settings".
Once all of this is done, click "Join". You will be required to confirm the transaction on MetaMask, and once it is confirmed, the PLP tokens will automatically be staked and collecting rewards for you. Congratulations, you have successfully opened a Limone position!
Adding Leverage
Limone offers you the ability to easily add leverage to your existing position. You can use the PLPs in your open position as collateral to borrow MIMs, a collateral-backed stablecoin, to then purchase more PLPs. This process is possible thanks to Abracadabra lending markets. For more details, read about it here.
First, you need to specify how much of your deposited PLPs should be used as collateral. Any portion of your PLPs not included as collateral will remain completely separate and will not be subject to leverage risks, such as liquidation risk. Once you specify the amount of PLP collateral to be deposited, you can adjust the amount of leverage by adjusting the slider. As you move the slider to the right, the amount of leverage increases.
The “Position Health” metric represents the percentage decrease in PLP price that must occur before your leveraged position is subject to liquidation. In the example below, if the price of the PLP decreases by 27.85%, the position will be liquidated in order to repay your loan.
While adding leverage will increase the amount of fees and rewards that you earn, it also adds risks such as potential liquidation if the price of the underlying assets decrease, increased slippage in trades, etc. Please be aware of the risks of adding leverage before using it on your own positions.
Removing Leverage
If you would like to remove leverage, select “Close position” on the leverage tab. In this process, Popsicle will take your PLP collateral and sell it to repay your MIM loan. If the position has gone up in value since opening the loan, you will earn a profit. If the position has gone down in value since opening the loan, you will realize a loss.
To completely remove leverage, you can simply click on “Close Position.” Alternatively, you can adjust the respective sliders to specify the amount of MIMs to repay and the amount of collateral you would like to remove.
All removed PLP collateral will be withdrawn to your wallet. Please see Withdrawing PLPs for more information on how to extract the underlying assets from your PLP.
Monitoring Open Positions
You can monitor all of your open Limone positions in the "My Positions" page.
Here you will see all the basic info, as well as if the position is currently generating fees or not! You should expect your PLP Value to fluctuate as the underlying asset prices change and as rewards / fees are collected.
Withdrawing PLPs
If you want to withdraw some or all of your PLP tokens, you can do so by clicking "Withdraw." Please note that if you have an open leverage position, you will need to deleverage before withdrawing.
This window will allow you to select how many of your PLPs you wish to withdraw. After withdrawing, you will receive the default AMM’s LP token, which you will then need to unwrap on the default AMM to get back the underlying assets.
| Chain | Limone Pair | Default AMM | Address of LP Token |
|---|---|---|---|
Avalanche | USDC.e/AVAX | Trader Joe |
You may sometimes notice that the withdrawable amount is considerably less than the amount locked in Limone Farming pools. Our strategies keep approximately 90% of the LP in staked in the farming contracts, and 10% in Limone Degenbox to allow users to withdraw smoothly! As a consequence, the amount withdrawable is limited.
Once this limits approaches zero, new LP tokens are unstaked and withdrawals are again available!
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