[HOWTO] Add liquidity in the SBCH/BCH in Hybrix and earn allocator fees

1 316
Avatar for norphine
2 years ago

Hybrix wallet now supports SmartBCH. This means we can swap tokens between SmartBCH and other supported chains, which includes BCH.

The key point is that we have the first non-custodial BCH <-> SBCH swap (remember that Coinflex and Wagon.cash are custodial and centralized). But when swapping between these chains, Hybrix cannot mint BCH on SmartBCH (called SBCH), so we need people to provide liquidity. As it's a decentralized protocol, you can do it.

How can I provide liquidity?

Providing liquidity is easy, as you only need the Hybrix wallet. There's no need to set up a full node, the only requirement is to lock 10 HY as a security reserve. You can later recover this funds, but keep in mind that HY price fluctuates.

  1. Go to the Hybrix wallet and create an account, or login if you have one. As always, keep your credentials safe.

  2. The first step is to click "Add assets" and add BCH and SBCH.

  3. Then you need to buy 10 HY. My recommendation: deposit in you BCH wallet the amount do you want to allocate (provide liquidity) plus and extra amount to buy 10 HY. Don't try to buy HY using SBCH because there's no liquidity right now. Buying it's easy: deposit BCH in Hybrix, and in the same BCH wallet, click on "Swap" and then "Send". Select HY and then follow the steps.

  1. Once you've got 10 HY in your Hybrix wallet, deposit the BCH and the SBCH do you want to allocate. Remember that you can provide liquidity in any asset and chain you want, this is just and example for the BCH/SBCH pair.

  2. Time to go to wallet options -> Allocator panel. In you main balance you should have by now, at least, 10 HY. So the first step is to place those HY tokens in the Security reserve. You do this in 2 steps: click "Transfer" (1) to place the tokens in the "Allocated balance" section and then, click on the "Reserve" (2) button to place the HY tokens in the "Security Reserve".

  1. Once done, click on "Create swap pair". Choose from "BCH" to "SBCH", click next, and transfer the SBCH do you want to allocated from your wallet balance to the allocated balance. You can set here your allocation fee, that's the fee you're gonna earn when someone swaps from BCH to SBCH. The current range is 0.1 to 0.3%. Hybrix will always pick the lower fee.

  2. Repeat step 6, but this time with the reverse direction: from "SBCH" to "BCH".

  1. Done! On the Allocator Panel, you'll see your Allocation Portfolio.

Risks and cons

Finally, we have a decentralized way to swap BCH <-> SBCH and even other chains and tokens, boosting SBCH adoption.

Using the wallet, anybody can realize that is quite slow: Hybrix runs over TOR, so the higher privacy is paid with a worse user experience. One way to solve this is to run an Hybrix node, contributing to the network.

You can see also some bugs: strange BCH/SBCH ratios (I've been told that it will be always 1:1 despite what the wallet set) or the impossibility to change the allocator fee once set.

I see 2 main risks:

  1. Devaluation of the HY token: although you can withdraw you HY tokens from the security reserve, they can lose value as the price is volatile. Anyway, 10 HY is affordable by most people.

  2. Hackers: like any other dApp, it's a omnipresent risk. The advantage of Hybrix is that is not a very new platform.

If you don't find yourself comfortable allocating some funds in Hybrix, you can wait for SmartBCH integration in AtomicDEX, which doesn't require any reserve but does require to be online for market makers.

If you find some mistake in this article or have any recommendation, leave me a comment.

$ 11.46
$ 10.96 from @TheRandomRewarder
$ 0.50 from @RufusYoakam
Avatar for norphine
2 years ago


It should be a good and useful project, but if it can fix its shortcomings.

$ 0.00
2 years ago