Liquidity Provision

Magma Finance is a permissionless DEX, meaning that anyone can deploy liquidity for any asset they wish. However, creating a gauge for rewards is a permissioned process, and all new gauges must be whitelisted by the team. When liquidity providers deposit their LP into a gauge, they give up 100% of swap fees in exchange for the oMAGMA emission rewards for that pool. If, instead, a user creates liquidity for a pair that does not have a gauge, that LP will keep 80% of swap fees, while 20% are taken by the protocol to be distributed to veMAGMA holders. The same is true for LP positions that are not in a gauge, even if those assets are whitelisted. For example, say there is a MNT/USDC gauge. A user can deposit into the gauge and get emissions. Or that user could create their own custom range for liquidity with this pair, and keep 80% of swap fees. This is a viable option for advanced users who believe their custom range would outperform the pool rewards, or want to set a pseduo "buy range" or "sell range" for a specific asset. The intention is that Magma would be a useful universal DEX, containing enough deep liquidity for core assets that new projects would find it worth deploying liquidity even before whitelisting a gauge.

Summary

• Liquidity deposited in a gauge: give up 100% of swap fees in exchange for oMAGMA emissions

• Liquidity position kept outside of a gauge: give up 20% of swap fees and keep 80%