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Liquidity Pools
When you add your token to a Liquidity Pool you will receive Liquidity Provider (LP) tokens and share in the fees.
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LP Tokens
As an example, if you deposited VERTO and REBUS into a Liquidity Pool, you'd receive VERTO-REBUS LP tokens.
The number of LP tokens you receive represents your portion of the VERTO-REBUS Liquidity Pool.
You can also redeem your funds at any time by removing your liquidity.
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Liquidity Providers earn trading fees
Providing liquidity gives you a reward in the form of trading fees when people use your liquidity pool.
Whenever someone trades on VertoTrade, the trader pays a 0.25% fee, of which 0.17% is added to the Liquidity Pool of the swap pair they traded on.
For example:
- There are 10 LP tokens representing 10 VERTO and 10 REBUS tokens.
- 1 LP token = 1 VERTO + 1 REBUS
- Someone trades 10 VERTO for 10 REBUS.
- Someone else trades 10 REBUS for 10 VERTO.
- The VERTO/REBUS liquidity pool now has 10.017 VERTO and 10.017 REBUS.
- Each LP token is now worth 1.00017 VERTO + 1.00017 REBUS.
To make being a liquidity provider even more worth your while, you can also put your LP tokens to work whipping up some fresh yield on the VERTO Farms, while still gaining your 0.17% trading fee reward.
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Impermanent Loss
Providing liquidity is not without risk, as you may be exposed to impermanent loss.