What is Adamant Finance?
If you've talked to a DeFi degen you have probably heard him repeatedly mention the word "yields," followed by astronomic numbers and rocket emojis 🚀🚀🚀. In fact, you may have heard about how the process works and said to yourself "if he can do it, I can too."
The idea is to lock your crypto into liquidity pools and get a percentage of the trading fees. You inner Warren Buffett will compel you to reinvest profits into the pool and grow your fortune over time. While it sounds good on paper, several challenges arise in practice. Let me break it down to you: yield farming is a tedious activity that will eat your time and gas fees.
The simple act of providing liquidity is easy, compounding rewards requires constant work and dedication. For those who dare stretch the limits to what they can yield farm, Adamant Finance is their oasis. True to the spirit of DeFi, Adamant Finance is a non-custodial yield optimizer protocol that provides users with an easy and safe way to maximize their yield farming income. Safety is guaranteed by the fact that you remain in control of your funds when using the protocol.
Adamant Finance is a collection of smart contracts that do the heavy lifting on your behalf. In simple terms, Adamant Finance doesn't have the ability to move user funds to external addresses other than the ones defined within the contracts. It offers predictability, which is great for long-term yield farming.
Adamant Finance doesn't require KYC as it’s a decentralized protocol running on a blockchain. On the good side, anyone can participate and multiply their yield earnings. On the bad side, hackers benefit from the same access, as they watch for vulnerabilities to exploit for their own benefit.
Since its inception in 2021, Adamant Finance protocol has never been hacked. The code has been audited by Certik, and no vulnerabilities have been found. That is not to say that Adamant Finance is 100% safe from hacks. Audits are a formal verification that may miss out on edge cases.
To mitigate potential vulnerabilities, the team is constantly checking the code and improving its security. Specifically, Adamant relies on Chainlink oracles to prevent flash loan attacks. Other checks have been put in place to minimize risks. Most of them are common security practices that prevent a malicious takeover of the admin private keys, and block reward manipulation exploits.
To explain Adamant Finance, we just have to look at the importance of yield farming. Basically, every DeFi protocol needs to have liquidity in order to function. In order to attract more users, protocols such as the Sushiswap and Quickswap reward LPs with their native tokens. Adamant Finance mainly derives its value from automating liquidity provision. Its smart contracts save time and gas fees for users who want to benefit from the compounding process.
On top of the code checks, Adamant Finance is governed by its ADDY token holders. Governance proposals range from changing the protocol parameters to upgrading the entire protocol.
How does Adamant Finance work?
Adamant Finance is the Swiss knife of yield farming. Its smart contracts know the optimal frequency and timing of when to compound and reinvest your yields. In order to increase yield farming rewards, Adamant aggregates assets into a fund pool. Having one giant pool earns substantially more fees which are split among its participants. It is a simple strategy at core that reduces gas fees and simplifies the entire process.
The protocol currently offers over 100+ vaults for Quickswap, Sushiswap, and other leading platforms across multiple chains. Users deposit their assets into Adamant's vault contracts, which then automatically compound harvested reward tokens into more of the deposited asset up to 1000+ times each day.
Users can automatically maximize their yield by depositing Liquidity Provider (LP) tokens to Adamant's vault contracts.
Adamant Finance Auto-Compound LP
Auto-compounding vaults automatically sell the harvested tokens and compound it into more of whatever tokens are staked.
Let's say you have 1000 MATIC tokens that you want to stake in an auto-compounding vault. The vault automatically takes your MATIC and uses them to farm more MATIC tokens through yield farming strategies.
As the vault earns more MATIC tokens, it automatically sells them for the base token (e.g. ETH, USDC, etc.) and compounds your staked tokens into more MATIC tokens. This means that your balance of staked MATIC tokens increases over time, without you needing to manually sell and reinvest your earnings.
Auto-compounding frequency will vary based on factors like the vault's TVL, the yield of the pool being farmed, the cost to compound the vault, the chain the vault is on, and vault activity.
Adamant Finance Maximizer
Maximizer vaults automatically deposit the harvested tokens in the single-staking pool for that token. This allows stakers to get a much higher APY than traditional auto-compounding vaults while their staked capital avoids exposure to the harvested token.
Let's say you have 1000 USDC that you want to stake in a maximizer vault that's focused on farming ETH tokens through yield farming strategies. The maximizer vault automatically takes your USDC tokens and uses them to farm ETH through the yield farming strategy.
As the vault earns more ETH tokens, it automatically deposits them into the single-staking pool for ETH tokens. This allows you to earn a higher APY on your staked USDC than you would through traditional auto-compounding vaults. In addition, your staked capital is not exposed to the harvested token (ETH in this case), which may be subject to market volatility and other risks.
Adamant Finance Smart Farming
Users deposit ETH collateral into Smart Farming vaults, which automatically: borrow tokens to execute a yield farming strategy, and compound harvested tokens, like normal auto-compounding vaults.
The key difference is that Smart Farming protects the user from liquidation by repaying the loan if the user's loan to collateral value falls too low.
ADDY Tokens
Adamant Finance is powered by its native token, $ADDY. Users can earn ADDY by using the protocol or by buying it on Quickswap. With an initial supply of 100,000 tokens, ADDY is mainly minted based on the profit generated through performance fees from Adamant's normal vaults. 300 ADDY are minted for every 1 ETH earned in performance fees. For every 100 ADDY minted, 15 additional ADDY will be minted to the developer fund to ensure rapid innovation.
The ADDY token does not have a maximum supply, but the emission rate of ADDY will significantly decrease over time. In addition, ADDY issuance is based on the performance fees. This means less ADDY will be minted if the vaults underperform. To ensure the value of $ADDY, 50% of the performance fees are reserved for buybacks. The rest of the performance fee, after protocol expenses are paid, is distributed as the native chain's token e.g. WMATIC, to users with staked ADDY, vested ADDY, or locked ADDY in the fee distribution contract.
Both staking ADDY and locking ADDY allows users to earn profits generated from Adamant's vaults. In addition, locking ADDY also boosts the amount of ADDY earned by up to 100% for most of Adamant's vaults and allows users to participate in the governance process of Adamant.
How to make money on Adamant Finance?
Making money on Adamant Finance is the literal expression of "putting money at work." Unlike depositing liquidity on a DEX, Adamant Finance goes a step further and compounds the gains for you.
The idea is to keep the deposit for a longer time in order to let the returns compound. Using this strategy, you can multiply investments faster than on a regular DEX because the protocol pays less fees whenever the investment is auto-compounded.
Adamant Finance Farming
Adamant Finance offers a generous selection of crypto assets to farm. In order to farm on Adamant Finance, users need to hold both the assets for the pool they want to join. For example, joining the MAI/USDC pool requires you to hold equal quantities of MAI and USDC tokens.
Here's how you farm on Adamant Finance:
Open the Adamant Finance app
Navigate to the "Vaults" section
Select the pool of your choice
Click to add liquidity
Input the amount of tokens you want to deposit
Click "Stake" and approve the transaction
Each vault has a withdrawal fee for early withdrawals within 72 hours to prevent users from "yield sniping", which is stealing yield by depositing just before the vault is compounded and then immediately withdrawing.
Adamant Finance Vesting
In addition to the yields, some vaults are also rewarding users in ADDY tokens. Freshly minted ADDY is considered to be vested.
ADDY tokens can be claimed from the "Vesting" section. Users can either withdraw their tokens immediately at a penalty, or wait for the 90 window to claim their ADDY tokens in full.
Adamant Finance Staking
With ADDY tokens in your wallet, you can go ahead and multiply them by staking. By staking ADDY, users are entitled to a portion of the performance fees on the platform.
With 2.9% per vault performance, the fees quickly add up. A portion of the vault fee is used to pay for the cost of compounding vaults and development, and a small potion goes to the ADDY stakers.
Here's how you stake on Adamant Finance:
Open the Adamant Finance app
Navigate to the "Stake" section
Input the number of ADDY tokens you would like to stake
Click "Stake"
Approve the transaction
Unlike vested tokens, users can withdraw their staked ADDY anytime without a penalty.
Price Prediction for Adamant Finance — Can it hit $1000?
Buying and hodling ADDY — the native token of the Adamant Protocol — is one way of potentially making money on Adamant Protocol.
The main utility of ADDY is to be staked in order to use the Adamant protocol. Therefore, its value relies on the performance of the protocol.
By looking at its current price, it’s natural to think about the chance of ADDY hitting $10 per token. This can happen sooner, or way in the future, and is determined by a couple of ever changing factors.
Let’s examine the potential growth of the ADDY token by analyzing its tokenomics. ADDY’s current market cap sits comfortably at ${MARKET_CAP}. With {CIRCULATING_SUPPLY} ADDY tokens being in circulation today, that means a price of {PRICE} per ADDY.
How did we come to that calculation? It’s quite easy, the price of a ADDY token is equal to its current market cap divided by the number of tokens in circulation. Dividing ${MARKET_CAP} by {CIRCULATING_SUPPLY} gives us a result of {PRICE} for each ADDY coin.
By changing the order in the simple formula above we can use it to calculate other things as well. This helps us a lot because we can deduce the market cap of ADDY at different token prices. Then, we can use the result to compare it to the current state of the network and see what would be required for ADDY to hit that price.
At a price of $10 per token, that means the current market cap of ADDY would equal ${{CIRCULATING_SUPPLY} * 10}. Remember that we arrived at this number by multiplying the amount of circulating tokens by $10.
Now let’s shift our attention to the fully diluted market cap.
Some blockchains may have their tokenomics built in a way that only a small percentage of tokens are circulating at the beginning. This can be misleading because we don’t have the full picture and only take into account the current number of coins released in the market.
The fully diluted market cap represents the total value of a coin if all tokens were in circulation. ADDY’s whole supply of tokens is {MAX_SUPPLY - TOTAL_SUPPLY + CIRCULATING_SUPPLY} ADDY which means that no more coins above that number will ever be created.
These tokens are not created at the discretion of a specific entity. They are created automatically by the network to reward different actors that keep it secure.
How does this impact the price of ADDY? Taking into account the current price of an ADDY token, that would result in a fully diluted market cap of ${MAX_SUPPLY - TOTAL_SUPPLY + CIRCULATING_SUPPLY * PRICE}. ADDY coins that have been burned are not taken into consideration because they have been permanently removed from circulation.
Whether it seems gigantic or not, the number we came to above only takes into account the current price of an ADDY token. Doing the same calculation but with a price of $10 gives us a result of ${{MAX_SUPPLY - TOTAL_SUPPLY + CIRCULATING_SUPPLY} * 10} for the ADDY protocol fully diluted market cap.
These are all crucial details to know when calculating if ADDY can reach the price of $10 per token. If the diluted market capitalization is way too high, the token has little room left to grow. Blockchains in general have no cap on the value they can reach, whether that number seems possible it’s totally up to you.
The initial supply of ADDY was 100,000 tokens. ADDY is mainly minted based on the profit generated through performance fees from Adamant's normal vaults. 300 ADDY are minted for every 1 ETH earned in performance fees. The Adamant community may decide at some point to increase the token supply in order to accommodate more users.
The future of ADDY depends solely on its growth as a network used by tens and hundreds of millions of users. With its limited token supply, it is technically possible for the price of ADDY to reach $10 and even more by 2030.
If you’re looking to add some ADDY to your portfolio, the most trusted places to get some are Binance and Coinbase.