Momentum is emerging as a pivotal liquidity infrastructure provider within the Move ecosystem, operating as a multi-chain ve(3,3) decentralized exchange. Since its beta launch, the platform has experienced remarkable growth, scaling from several hundred users to over 325,000 and increasing its total value locked from around $200,000 to more than $57 million. Its swap volume has also surged, recently surpassing $2.1 billion.
The project is developed by the same team behind MSafe (Momentum Safe), which manages over $700 million in assets across networks like Sui, Aptos, and Movement. Momentum is backed by prominent investors, including Coinbase Ventures, Circle Ventures, Jump, Aptos Foundation, and Sui Foundation. With contributors from notable projects such as Curve, Aerodrome, and other DeFi pioneers, Momentum is designed as a public good to facilitate efficient and deep liquidity for the Sui ecosystem.
How Momentum's ve(3,3) Model Works
The ve(3,3) model is an advanced iteration of automated market maker (AMM) design that combines vote-escrowed tokenomics with a sustainable fee distribution structure. In this system, users can lock their tokens to receive veTokens, which grant them governance rights and a share of trading fees.
This model is particularly effective at aligning long-term incentives between liquidity providers, traders, and token holders. It reduces sell pressure, encourages active participation, and creates a more efficient and rewarding liquidity environment.
Step-by-Step Guide to Providing Liquidity on Momentum
To start earning yield on Momentum, follow these steps:
Connect Your Wallet
Initiate by clicking the “Connect Wallet” button on the Momentum interface. Select your preferred Web3 wallet from the options and approve the connection request. Ensure your wallet is funded with the assets you plan to use.
Choose a Liquidity Pool
Navigate to the “Liquidity” section to explore available pools. Each pool displays key metrics such as total liquidity, annual percentage yield (APY), and the tokens involved. Select a pool that aligns with your assets and strategy.
Deposit Your Tokens
After choosing a pool, click “Add Liquidity.” You can typically deposit both tokens in the pair at a balanced ratio. For a more focused approach, you may have the option to enable a single-token deposit, which automatically converts one asset into the required pair.
Optimize with Custom Price Ranges
For concentrated liquidity positions, you can define a specific price range. Providing liquidity within a narrower range often results in higher fee earnings, provided the token’s market price remains within your set bounds. This is ideal for stable pairs or assets with low volatility.
Confirm and Monitor
Review the details of your transaction, including potential slippage and network fees. Once confirmed, approve the transaction in your wallet. Your position will then be active, and you can monitor its performance, fees earned, and impermanent loss directly in the interface.
Benefits of Using Momentum DEX
Momentum offers several advantages for liquidity providers and traders:
- Higher Yield Potential: The ve(3,3) model efficiently distributes fees and rewards to active participants.
- Deep Liquidity: Its design attracts significant TVL, resulting in better swap rates and lower slippage for traders.
- Multi-Chain Support: While native to Sui, its multi-chain vision expands opportunities across ecosystems.
- Professional Backing: Support from top-tier investors and an experienced team adds to the protocol's credibility and long-term vision.
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Frequently Asked Questions
What is the ve(3,3) model in DeFi?
The ve(3,3) model is a tokenomic structure where users lock their governance tokens to receive vote-escrowed (ve) tokens. These veTokens give holders the right to vote on emission directions and earn a share of the trading fees generated by the protocol, promoting long-term alignment.
Is providing liquidity on Momentum safe?
While Momentum is built by an experienced team and audited, all decentralized finance activities carry inherent risks. These include smart contract vulnerabilities, impermanent loss, and market volatility. Users should only provide liquidity with funds they are prepared to risk and are encouraged to conduct their own research.
What is a single-token deposit?
A single-token deposit allows a user to provide liquidity using only one of the two tokens in a trading pair. The protocol automatically converts half of the deposited amount into the paired token, simplifying the process and reducing the number of transactions needed.
How are yields generated on Momentum?
Yields are primarily generated from trading fees paid by users who swap tokens within the pools. These fees are distributed to liquidity providers proportionally to their share of the pool. Additional token emissions or rewards may also contribute to the overall APY.
Can I withdraw my liquidity at any time?
Yes, liquidity positions on Momentum are typically non-custodial and permissionless. You can remove your liquidity at any time by navigating to your position, selecting “Remove Liquidity,” and confirming the transaction. Be aware of any unlock periods if you have locked tokens for veNFTs.
What networks does Momentum support?
Momentum is primarily built on the Sui blockchain. Its multi-chain approach indicates potential future expansion to other Move-based networks like Aptos, aiming to become a central liquidity hub for the broader Move ecosystem.