How Does Sirius Work?

The actual mechanics of how Sirius works to the benefit of traders and liquidity providers

How does it work?

Sirius DEX operates as a decentralized exchange (DEX) for two assets: Tez (XTZ) and tzBTC. It combines standard DeFi DEX features with unique protocol-level incentives, making it especially attractive for liquidity providers.

---

Sirius functions like any other decentralized exchange, but it exclusively facilitates trades between two assets: XTZ and tzBTC.

• Trading Fees: Traders pay a 0.2% fee (20 basis points) on each transaction.

  • 0.1% is burned, reducing the total XTZ supply.

  • 0.1% is added to the liquidity pool, increasing its value for liquidity providers.

---

For Liquidity Providers

Liquidity providers (LPs) supply equal amounts of XTZ and tzBTC to the pool and are rewarded in two ways:

1. Transaction Fees:

• LPs earn a proportional share of the 0.1% fee retained in the pool from every trade. This is distributed based on their contribution to the total pool liquidity.

2. Protocol-Level Subsidy:

• The Tezos protocol directly subsidizes liquidity providers with 5 tez per block.

• This subsidy is distributed proportionally among all LPs based on their share of the pool.