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How to earn rewards on the LUSD / OHM pool using Crucible

How to earn rewards on the LUSD / OHM pool using Crucible

Derrick Nguyen

October 8, 2021

In this post, I’ll provide a step-by-step guide on how to earn liquidity mining rewards on LUSD-OHM SLP tokens using Alchemist’s Crucible. 

Quick Disclaimer: This tutorial is not a recommendation and interacting with DeFi protocols can be risky. Please do your own research and use your best judgement.

On Oct. 6th, an incentivized LUSD-OHM liquidity pool on Sushiswap went live! If you’re unfamiliar with OHM, it’s a decentralized reserve currency built and maintained by OlympusDAO. There’s a lot more to it than that, but I’ll be covering OHM and Olympus in depth in a future tutorial. The LUSD-OHM pool is incentivized until November 10th, 2021 with $400,000 of LQTY, OHM, and MIST rewards, but we’ll need to cover a few things before you get started. Original announcement here

What is Alchemist? 

Alchemist is a group of community members that build a variety of products and reward contributors through their native token, MIST. So far, four primary products have been built:  Copper, Sandwiched, MistX, and Crucible. For this tutorial, we’ll only be focusing on Crucible. 

What is Crucible? 

A Crucible is an NFT that can be minted and stored in an Ethereum wallet (wallet compatibility chart here, but it’s recommended to use Metamask). After minting a Crucible, it acts as a smart wallet for other ERC20 tokens and provides unique benefits. Let’s expand on that a bit:

  1. Have you ever needed to transfer multiple tokens to another address in a single transaction? You can solve this issue by minting a Crucible and storing your desired ERC20 tokens inside of it. Since it’s an NFT, you can transfer it to another address along with all of the contained tokens in one transaction! 
  1. Have you ever needed separate asset management on a single wallet? Crucibles also provide another use case since you can mint multiple, not just one. Mint however many Crucibles needed, store different tokens on each one, and you’ll be able to categorize and manage your assets more efficiently.
  1. Have you ever wanted to participate in liquidity mining programs, but didn’t want to give up custody of your liquidity pool (LP) tokens by staking them in other contracts? Well, Crucibles remedy this because they can also store LP tokens! If a reward program is built around Crucible, users will be able to participate in a non-custodial (i.e. no staking requirement) fashion by simply “subscribing” — these programs are called Aludel. This also adds another use case of subscribing to multiple reward programs at once, but we’ll cut it short for the sake of this tutorial. To learn more about Crucibles and Aludel, read here

For this reward program, owning a Crucible will be a requirement. Now that you know what it is and the included benefits, let’s continue! 

Note: If you want to skip these first two steps, feel free to “zap” into the MIST-ETH LP here, then scroll down to “Minting a Crucible”

Obtaining MIST 

In order to mint a Crucible, you’ll need to provide liquidity into the MIST-ETH LP on Uniswap V2. This means you’ll also need to acquire some MIST beforehand, which you can do here

Note: You can also use MistX for all swaps throughout this tutorial, which is a product built by Alchemist that implements front-running protection. Learn more about it here.

Note: You’ll also need an equivalent $ amount of ETH when providing liquidity

At this point, you’re probably wondering how much MIST you need in order to provide a sufficient amount of liquidity. There isn’t a minimum requirement of MIST-ETH LP to mint a Crucible, but it’s worth considering that your MIST-ETH LP position can earn additional MIST rewards from the Aludel program displayed below: 

Max Multiplier explained - quote from their Discord:

“The multiplier is a release mechanism for your rewards. It applies to how much rewards you are entitled to based on your % of the pool. When starting at a 1x multiplier you’ll earn 10% of the rewards you are entitled to. This scales to a 10x (100%) over 60 days. (For Aludel v1.5)” 

In other words, you’ll earn more of the rewards your LP tokens are entitled to the longer you stay subscribed to a farm. 

Now that you’ve decided how much MIST you want to obtain, all that’s left to do is input the values and confirm the subsequent transactions.

Providing Liquidity to the MIST-ETH LP

Now that you have some MIST and ETH, you’ll want to provide liquidity here

Note: Please make sure you’re providing liquidity to the LP on Uniswap V2, not V3. A Crucible can only be minted from Uniswap V2 LP tokens.

Once you’re here, the process is the same (i.e. input desired values, confirm transactions). After doing so, you’ll receive your MIST-ETH LP tokens. 

Minting a Crucible

Now, we can get into the fun part! To mint a Crucible, head to the UI here. Feel free to browse around, but you’ll want to click on “Mint a Crucible” within the top tabs. 

After minting a Crucible, you can click on “Your Crucibles” to view a summary of all assets in your Crucible, to manage your assets (i.e. deposit, withdraw), and to view which programs you subscribed to and the $ amount of rewards they accrued. 

Now, let’s cover the next required step to earn rewards on the LUSD-OHM pool. 

Obtaining LUSD and OHM 

Note: “Zaps” can also be utilized for the LUSD-OHM pool if you want to save some time. If you’re doing this, scroll down to “Subscribing to Ohmies get Liquity”

Before providing liquidity, you’ll first need to obtain the required tokens — both LUSD and OHM.

To obtain LUSD, you can borrow LUSD against ETH as collateral (guide on this here) or you can buy LUSD off of decentralized exchanges.

To obtain OHM, you can purchase OHM bonds with certain tokens (again, keep an eye out for a future tutorial) or you can buy OHM off of decentralized exchanges.

Note: Again, keep in mind that you’ll need a proportional amount of both tokens (e.g. $500 of LUSD, $500 of OHM)

Providing Liquidity to the LUSD-OHM Pool

Now that you’ve obtained the required tokens, you’ll need to provide liquidity here

Once you’re on Sushiswap’s UI, you’ll need to input your desired amounts of both tokens and confirm the subsequent transactions. After this, you’ll receive your LP tokens and your position will be displayed similar to the image below: 

Subscribing to “Ohmies get Liquity” 

Phew, we made it! It’s finally time to earn rewards with your Crucible and the LUSD-OHM SLP tokens. To find the farm, head back to the Crucible UI and click “Reward Programs” in the top tab. 

Once you find the farm, the rest is simple. Click “Subscribe”, input your desired amount of LP tokens, and confirm the transactions.

And that’s it! You’re finally earning rewards using Alchemist’s Crucible and LUSD-OHM SLP tokens!

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