You can now claim kVCM. Your K2 allocation starts vesting at protocol launch.
Klima Protocol App

Overview for Liquidity Providers

Users can provide liquidity to support Klima’s market infrastructure and earn rewards for doing so.

Robust liquidity is essential for the Protocol to service demand efficiently, minimise slippage, and maintain smooth entry and exit for all ecosystem participants.

Liquidity Pools Overview

There are two primary liquidity pools that support the ecosystem:

  • kVCM / USDC: a stablecoin pairing, that allows all users to enter or exit the ecosystem.

  • kVCM / K2: protocol token pairing, allowing users to enter or exit the K2 governance token via kVCM.

The Protocol will maintain a USDC correlation only as the primary currency used within carbon markets. This allows users to infer Protocol relevant carbon pricing (done in kVCM terms) against USDC. Further, it minimises the Protocol tokens and carbon correlation with beta assets.

Klima’s main liquidity venue is Aerodrome, the leading decentralised exchange on the Base network. LPs to earn trading fees and protocol incentives.

Providing Liquidity Directly on Aerodrome

Users may supply liquidity on Aerodrome without interacting with the Klima Protocol:

  • The pool charges a 0.3% fee on every trade.

  • Liquidity providers receive 90% of these fees.

  • Example: If you supply 10% of pool liquidity and the pool generates $10,000 in weekly fees, you earn $900.

Coming soon

Providing Liquidity Through the Klima Protocol

Users may also deposit their liquidity positions into the Klima Protocol at standard maturities. Staked positions are eligible for protocol-native incentives paid in K2 and kVCM see yield.

This route is suited to users seeking both trading-fee income and protocol emissions.

  • Trading fees are claimable via the Aerodrome UI.

  • Klima incentives are claimable via the Klima dashboard.

  • Incentive distribution follows the rules outlined in the Protocol’s Whitepaper.

Risks

Providing liquidity involves several risks, including:

  • Token price volatility: The value of assets in the pool may rise or fall.

  • Impermanent loss: LPs may incur losses if the relative prices of pooled tokens diverge significantly.

  • Smart contract risk: Liquidity is managed by open-source smart contracts deployed on Base.

  • Market risk: Trading volumes, incentives, or pool depth may change over time.

As with all markets, participants should understand these risks before providing liquidity.

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