Earn More with xSTRK: Liquidity Provision on Ekubo Simplified

xSTRK, STRK's liquid staking token by Endur, has quickly established itself as the leading LST on Starknet. Within just a month of its launch, xSTRK has captured approximately 20% of all staked STRK, showcasing strong adoption and trust within the ecosystem.

At the time of writing, xSTRK is offering an impressive APY of approximately 15% (You can see the current APY here). This yield is already attractive on its own, but when combined with additional yield opportunities available for xSTRK, it unlocks a diverse range of options for DeFi users to maximize their earnings. This blog talks about liquidity provision for xSTRK/STRK pool on Ekubo.

About Ekubo

Before diving into the guide, let’s take a moment to talk about the AMM we’ll be using to supply liquidity. Ekubo Protocol is a cutting-edge Automated Market Maker (AMM) designed for seamless token trading. With Ekubo pools, users can instantly exchange tokens—for example, selling xSTRK for STRK—without the need for an intermediary, making it an efficient and user-friendly platform for liquidity provision and token swaps.

Ekubo’s DeFi pools are also part of DeFi Spring's efforts to distribute 90M STRK tokens to the community to accelerate the development and adoption of DeFi apps in the Starknet ecosystem. Hence, liquidity providers who open a position on the pool with any of the designated pairs become eligible for a share of the 90M STRK tokens.

It's a treasure trove of earning opportunities on Starknet. And here's how to lock in

How to Provide Liquidity for xSTRK/STRK on Ekubo

To get started, you’ll need to pair xSTRK (Endur) with STRK. While xSTRK can be paired with other tokens, this particular pair is the most popular and considered low-risk. The low risk stems from the minimal price volatility between xSTRK and STRK, making this pool an attractive option for those seeking stable returns with reduced exposure to impermanent loss.

Your next step after choosing the xSTRK/STRK pair is to:

1. Navigate the Ekubo interface here

2. Select a preferred pool (Concentrated or DCA-enabled)

3. Select fee tier [a]

4. Select price range to add position in [b]. More details on how to choose a price range is described below.

5. Specify the amount of liquidity to add [c]

6. Now, verify all the details and click Add liquidity

Great job! You've successfully provided liquidity with Endur (xSTRK) in six simple steps.

Deciding optimal price range to add liquidity

To set a range on Ekubo Protocol, you need to first define the price range that works for you. This ensures that your future trades will only be kept within that price range.

While your price range is a personal choice, you can set a lucrative but practical range to ensure you are in range most of the time. To compute this range, you first need to know the following information:

1. Current price of xSTRK with respect to STRK in Ekubo: As per above screenshot, its 1.01489 [d]

2. How frequently can you rebalance? Too frequent rebalances will cost you gas and you may have to pay withdrawal fee on ekubo each time you withdraw and add liquidity. However, the advantage is that you can stay in tight range earning maximum fee. Less frequent rebalances would mean you can add liquidity in wider range but probably earn less fees. For the purposes of this article, we assume 1 week as the rebalance time.

3. Estimated APY for the rebalance time: At present the APY is 15% and we would roughly assume it will be around 14% for the coming week at-least. You need not be perfect here, just approximate is enough. When in doubt, assume slightly less value.

So, we have the following variables:

1. curr_price: 1.01489 => Current price

2. rebalance_time: 604800 => (7 days in seconds)

3. estimated_apy: 0.14 => (We assume around 14% staking yield for the coming week)

What is estimated value of xSTRK in a week?
With the above yield information, xstrk price after a week can be calculated as:

$$xstrk\_ new\_ price = curr\_ price \times \left(1 + \frac{estimated\_ apy \times rebalance\_ time}{365 \times 24 \times 60 \times 60}\right)$$

Based on above values,

$$xstrk\_ new\_ price = 1.01489 \times \left(1 + \frac{0.14 \times 604800}{365 \times 24 \times 60 \times 60}\right)$$

\=> xstrk_new_price = 1.01761491014

This means that, xSTRK would probably trade around 1.0176 in a week. So, it makes sense to set min price slightly below current price and max price slightly above this new price. Based on these conditions, suggested price range can be:

1. Min price: 1.014

2. Max price: 1.018

With the said values above, the estimated APY is around 10%. Isn’t it great? Your net APY is about 21% now. (based on weighted average yield of xSTRK and STRK supplied)

Note: Remember to monitor your liquidity position regularly and rebalance it if it moves out of range. The calculations provided are subject to market conditions and may vary, so staying vigilant ensures you maximize your returns and maintain optimal performance in the pool.

Conclusion

Starknet ecosystem is known for its incredible work rate in the Layer 2 space. And opportunities like providing liquidity on Ekubo show that this work rate Is more about impact and progress than just ecosystem activity.

With Endur, we see a new meaning to the way active DeFi users on the network access and maximize value. And now, that you've learnt how to provide liquidity using Ekubo, the possibilities are endless.

Congrats, you’re now officially an LPeeer—welcome to the club liquidity providers 🎉