Bootstrapping Cross-Chain Liquidity on Ergo

Bootstrapping Cross-Chain Liquidity on Ergo: A Guide to MultiAssetLP and ERGAssetLP Campaigns.

Introduction With the advent of RoseBridge bringing wrapped assets from Cardano, Ethereum, and other chains to Ergo, there’s a growing need to create liquidity for these assets. MEW Finance offers two powerful campaign types — MultiAssetLP and ERGAssetLP — specifically designed for bootstrapping liquidity pools. Let’s explore how these tools can help establish cross-chain trading pairs.

Understanding the Two Campaign Types

1. ERGAssetLP Purpose: Create liquidity pools pairing ERG with any wrapped asset Use Case: Ideal for establishing primary ERG trading pairs for wrapped assets (rsADA, rsETH, etc.)
2. MultiAssetLP Purpose: Create liquidity pools between any two wrapped assets Use Case: Perfect for direct cross-chain trading pairs (e.g., rsADA/rsETH)

How ERGAssetLP Works

Let’s take an example of creating an ERG/rsADA pool:

Campaign Parameters:

• ERG Target: 1000 ERG
• rsADA Target: 10000 rsADA
• LP Fee: 3%
• Initial LP: 100%
• Min ERG Contribution: 10 ERG
• Max ERG Contribution: 100 ERG
• Min rsADA: 100 rsADA
• Max rsADA: 1000 rsADA

Contributors can participate on either side:

• ERG contributors provide ERG
• Token contributors provide rsADA
• Both sides must reach their targets for the pool to form

How MultiAssetLP Works

Example: Creating an rsADA/rsETH pool:

Campaign Parameters:

• First Token (rsADA) Target: 10000 rsADA
• Second Token (rsETH) Target: 10 rsETH
• LP Fee: 3%
• Initial LP: 100%
• Min/Max for each side set according to token values

Key Features for RoseBridge Assets:

1. RoseBridge Token Recognition

• Automatic detection of ‘rs’ prefixed tokens
• Special handling for wrapped assets
• Integration with RoseBridge token standards

1. Dual-Sided Contributions

• Allows separate contribution limits for each asset
• Enables balanced liquidity provision
• Maintains price stability during bootstrapping

1. Fair Distribution

• LP tokens distributed proportionally to contributors
• Both sides of contributors receive LP tokens
• Trading fees shared among all LP providers

Example Scenario — ERGAssetLP

Campaign Goal: ERG/rsADA Pool Contributors: ERG Side:

• User A: 400 ERG
• User B: 600 ERG

rsADA Side:

• User C: 3000 rsADA
• User D: 7000 rsADA

Result:

• Pool Created with 1000 ERG : 10000 rsADA ratio
• LP tokens distributed: ERG Side: User A (40%), User B (60%) rsADA Side: User C (30%), User D (70%)

Example Scenario — MultiAssetLP

Campaign Goal: rsADA/rsETH Pool Contributors: rsADA Side:

• User A: 6000 rsADA
• User B: 4000 rsADA

rsETH Side:

• User C: 4 rsETH
• User D: 6 rsETH

Result:

• Pool Created with 10000 rsADA : 10 rsETH ratio
• LP tokens distributed proportionally to all contributors

Benefits for Cross-Chain Assets

1. Immediate Trading Infrastructure

• Instant liquidity for wrapped assets
• Direct trading pairs without intermediary hops
• Reduced slippage for cross-chain trades

1. Community-Driven Liquidity

• Decentralized pool ownership
• Incentivized long-term liquidity provision
• Fair distribution of trading fees

1. Price Discovery

• Market-driven initial prices
• Balanced liquidity from both sides
• Natural price equilibrium

Strategic Considerations

1. Pool Ratio Selection

• Research current market prices
• Consider target trading volumes
• Account for token decimal differences

1. Contribution Limits

• Set based on token values
• Enable wide participation
• Prevent manipulation

1. Campaign Duration

• Allow sufficient time for both sides
• Consider token availability
• Plan around market conditions

Best Practices

1. Token Verification

• Verify wrapped asset addresses
• Confirm decimal places
• Check token specifications

1. Pool Parameters

• Set realistic targets
• Balance contribution limits
• Choose appropriate LP fees

1. Community Engagement

• Coordinate with token communities
• Ensure sufficient awareness
• Plan marketing efforts

Conclusion

MEW Finance’s MultiAssetLP and ERGAssetLP campaigns provide powerful tools for bootstrapping liquidity for RoseBridge wrapped assets. Whether creating ERG trading pairs or direct cross-chain pairs, these campaign types enable fair, decentralized, and efficient liquidity provision for the growing cross-chain ecosystem on Ergo.

Ready to launch a liquidity pool for wrapped assets? Visit MEW Finance to start your campaign.