Liquidity Migration to Premia Blue
Details on Liquidity Migration to Premia Blue and the Deprecation of Premia v2.
With the launch of Premia Blue on Arbitrum, Premia v2 will be deprecated on all chains besides Optimism.
Deposits and trades will be disabled shortly, but withdrawals will be available until the last non-Optimism v2 option expires ~4 months from now.
Additionally, all liquidity mining rewards have now been redirected from Premia v2 pools to Premia Blue vaults as outlined in the Premia Blue Governance Proposal 5.P3.
Users are encouraged to withdraw liquidity from Premia v2 and migrate to Premia Blue on Arbitrum, where options liquidity mining (OLM) is already live.
Migrating Liquidity to Premia Blue
The latest version of the protocol (Premia Blue) and liquidity mining rewards are now only available on Arbitrum.
To keep earning rewards, liquidity providers (LPs) need to manually withdraw their existing positions on Premia v2, and then deposit into a new vault or liquidity pool on Premia Blue.
Withdrawing from Premia v2 pools:
Navigate to v2.premia.blue
Check the “Positions” tab for any existing positions
Find the liquidity pool you wish to withdraw from
Start the process of withdrawal/divesting
Withdrawing from Knox Vaults:
The withdrawal process for Knox Vaults is fairly similar to liquidity pools, with a few extra points to note due to the auction schedule.
You’ll be able to withdraw collateral during the normal time (Friday 8AM to 4PM UTC) before the vault is deprecated
After deprecation, assets can be withdrawn at any time
Depositing to Premia Blue:
Once you begin the process of migrating to Premia Blue, you will have two options: liquidity pools and vaults. For a detailed overview, read this article.
Strategy vaults will give you a near-identical experience to Premia v2, where you can simply deposit assets and have them work for you. Emissions are currently only directed to the vaults.
Navigate to app.premia.blue
Go to the “Vaults” tab
Choose the vault you wish to deposit to
Enter the amount you wish to deposit
Click “Deposit” and accept the transaction in your wallet
Liquidity pools utilize concentrated liquidity and range orders. They are more complex for the average user, but offer more potential for earning trading fees. For more details on setting range orders, read this article.
To access vxPREMIA benefits on Premia Blue, you simply have to bridge your vxPREMIA to Arbitrum from inside the vxPremia page.
Navigate to v2.premia.blue
Connect on the network you locked PREMIA tokens on
Go to the “vxPremia” tab on the sidebar
Go to “My vxPremia”
Choose Arbitrum and complete the process.
Soon after the bridging process is complete, your vxPREMIA position should be visible inside the vxPremia tab on app.premia.blue.
Premia v2 Deprecation
Premia v2 will be deprecated on all chains except Optimism.
Migration to Premia Blue offers improved features and opportunities, contributing to the growth and advancement of the enhanced version of the protocol.
Thus, as part of our efforts in pushing the Premia ecosystem forward, we are deprecating the current implementations of Premia v2 on Ethereum, Fantom, and Arbitrum.
Deposits will be disabled on the front-end UI shortly after this article is published.
Withdrawals will be enabled until a few weeks after the last non-Optimism v2 option expires ~3 months from now.
You can always access the contracts directly to divest, withdraw, settle, etc.
Visit the support channel inside the Premia Discord for more guidance.
Options Liquidity Mining (OLM)
Traditional token liquidity mining rewards have been discontinued on every chain. Emissions are live on Premia Blue in the form of OLM.
Instead of traditional liquidity mining token rewards, liquidity providers are rewarded with PREMIA Call Options at a 55% discount to the underlying assets market price at the time of claiming. These options are physically settled using USDC, with a cost associated for exercising.
Here is an overview of Premia Blue’s OLM schematic:
Liquidity providers receive PREMIA Call Options that can be claimed at any time.
The strike price for these options is set to 45% of the current market price at the time of claiming. E.g. if PREMIA is trading at $1, the strike price will be set to $0,45.
The PREMIA Call Options will expire 30 days after claiming. Users are required to deposit sufficient collateral (USDC) for settling the options during this time.
The required settlement cost equals option size x strike price. E.g. if there are 100 PREMIA Call Options with a strike price of $0.45, the settlement cost will be $45.
At expiration, these options will be automatically settled, assuming the user has deposited sufficient collateral.
Upon settlement, 90% of proceeds circulate to users holding vxPREMIA, while the remaining 10% is directed to the Blue Descent DAO.
Protocol fees are collected on exercise, and taker fees are levied if the option is traded on the secondary market.
In the event that the liquidity provider only deposits a portion of the settlement cost, the appropriate amount of PREMIA Call Options will be exercised at maturity, while the remaining portion will be subject to the terms defined below.
Here is what happens if the liquidity provider opts not to deposit any collateral for the settlement cost within 30 days of claiming the options:
If the options are not exercised, they will instead be locked for a one-year period.
After conclusion of the one-year period, 20% of the options’ intrinsic value will be directly credited to the liquidity provider’s wallet. E.g. if the options could’ve been exercised for a net profit of $100 at expiration, the liquidity provider would earn $20.
OLM is designed to align the interests of liquidity providers, staking users, and the broader Premia Blue ecosystem. This mechanism is entirely modular, allowing any market to be deployed as a physically settled option.
It is built deliberately to be utilized by other DAOs and protocols that want to implement a more balanced framework for liquidity incentives.
For more details on OLM, read this article.
Premia Blue is Live on Arbitrum!
Premia Blue is the first non-custodial options settlement layer with fully customizable options parameters and risk exposure.
Maximize capital efficiency, define your own risk, and optimize fees earned with Premia Blue on Arbitrum!