LAVA — The Decentralized Liquidity Distribution Protocol void of Impermanent Loss

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Most developers try their best to ensure that their Smart Contracts are completely secured by having third parties audit them. Unfortunately, after all this rigorous testing, some of them still have bugs that make the platform very vulnerable. There are several stories that investors can relate to with regards to impermanent loss on smart contracts. This shortfall can’t stiffen the DeFi space’s growth; hence, Molten Finance’s team came with LAVA Protocol to ensure investors enjoy all the Decentralized Finance features without any fears of losing funds.

LAVA Liquidity Protocol Explained

The creation of this protocol within the Molten Finance Ecosystem was necessary as fees earned on the Molten Contract were stuck and not distributed to users within the ecosystem. The community members have collectively earned these funds by all their operations on Molten Protocol, but sadly there was no reaping of their own hard work. The team decided to create LAVA to rectify this situation and give back to their community supporters safely.

The protocol has 3 basic flows of the rate of transactions charged across the protocol. The protocol will have a starting tax rate of 6% of all transactions and distribute it across it to both MOL and LAVA stakers. Out of this 6%, 2% will be distributed to users staking MOL, and the remaining 4% will be automatically locked in the ETH/LAVA pool. From this pool, or Volcano as the community prefers to call it, 50% will be distributed to LAVA stakers, and the rest will be sent to the Ethereum burnt address.

The opportunities Yield Farmers have on LAVA Protocol

The team leading this project’s course has the community’s interest, both the experienced and greenhorns. Thus, they have made different avenues that will make it possible for everyone to increase his/her yield with ease. These ways of yield farming have been described below:

How to earn ETH/LAVA Liquidity Pool Tokens

They have developed a staking application where users can stake their LAVA and earn from the overall tokens generated on the ETH/LAVA Liquidity Pool Tokens. This is a unique feature from Molten Finance as most projects will rather require you to stake LP tokens to be rewarded. This makes it simple for the starters in the DeFi space to increase their yield.

In addition to this, the rewarded ETH/LAVA LP tokens will also earn users trading fees from Uniswap. Another way to look at this is that one can un-pool his LP Tokens and still stand the chance of earning ETH and LAVA directly into his own wallet.

What makes LAVA a sought after gem

LAVA Tokens has a fixed supply; hence it has zero inflation in the long term. To further strengthen its tokenomics, the team has put measures to make it a deflationary token that will gradually be burnt as the platform grows.

LAVA’s sale came with a maximum cap purchase of 125$ per person to prevent whales from buying it all up. The overall distribution has been transparent and fair all this while. Chief Architect has equally audited the smart contract at Swipe to ensure the protocol’s full security.

Just as the molten in the volcano never stops flowing, so that users in the Molten Ecosystem earn. If you look at the protocol and how they have structured it, you earn in either way. Whether you get actively trading or you hodl your tokens, you still get the chance to earn.

Originally published at on December 13, 2020.

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