Cauldron FAQ
What is Cauldron?
The Cauldron Protocol is an open-source smart contract for providing liquidity and trading CashTokens on the Bitcoin Cash network. Cauldron operates as a non-custodial automated liquidity protocol, emphasizing openness, transparency, and user accessibility.
The Cauldron Protocol and the Cauldron Interface were developed by Riften Labs.
How do I use Cauldron?
You engage with Cauldron Dex for activities such as creating liquidity pools or swapping tokens by navigating to the Cauldron application interface. Connect a Bitcoin Cash wallet with WalletConnect or use the create a new in-browser Cauldon wallet.
Who is behind Cauldron?
Cauldron is developed by the Norwegian company Riften Labs AS.
Contact hello@cauldron.quest
How does Cauldron Dex work?
Cauldron Dex utilizes the automated market maker (AMM) model. It consists of a series of smart contracts that standardize the processes for creating liquidity pools, and swapping CashTokens.
Tokens
What tokens can be traded on Cauldron?
All fungable cashtokens are compatible. Cauldron DEX recognizes BCMR and CRC20 token metadata. Cashtokens is the native token support for the Bitcoin Cash blockchain.
Liquidity provision
How Does Liquidity Provisioning Work on Cauldron Dex?
Liquidity provisioning on Cauldron Dex works through the creation of micro-pools. These are liquidity pools that individuals can set up, allowing them to earn a yield from the liquidity they provide. Anyone can provide liquidity to any token pair.
How can I earn by providing liquidity?
When you create a micro-pool on Cauldron Dex, you earn 0.3% of all transactions that occur through your pool. Importantly, liquidity providers (LPs) retain full ownership of their liquidity pool and receive 100% of the liquidity provider fees paid by users when swapping tokens in that pool (This is currently a standard 0.3% per swap)
Why provide liquidity?
Create a micro-pool and earn 0.3% off all transactions made through your pool. LPs own 100% of their liquidity pool and earn 100% of the LP fee paid by users when swapping.
Know what liquidity providers have a risk of impermanent loss.
What is impermanent loss?
Impermanent loss is the difference between holding tokens in your wallet versus staking them in a liquidity pool.
Impermanent loss occurs when the price ratio of tokens in a DEX pool changes from when they were deposited, potentially leading to less value upon withdrawal compared to just holding the tokens. It becomes permanent if assets are withdrawn while prices are diverged.
Trading
What are the trade fees?
Cauldron takes no trade fee. Liquidity providers take 0.3% LP fee. In addition, there may be some slippage. Slippage goes into the liquidity provider earnings. Finally, there is the Bitcoin Cash network fee.