Liquidity
Last updated
Was this helpful?
Last updated
Was this helpful?
allows you to provide liquidity by adding your tokens to liquidity pools or “LPs”. As an example, if you deposited $FINIX and $SIX into a liquidity pool, you would receive FINIX-SIX LP tokens.
The number of LP tokens you receive represents your portion of the FINIX-SIX liquidity pool. You can also redeem your funds at any time by removing your liquidity.
It’s not all bad for liquidity providers as you will also be given a reward in the form of trading fees. Whenever someone trades Definix, the trader pays a 0.25% fee, of which 0.2% is added to the liquidity pool of the swap pair they traded on.
For example:
There are 100 LP tokens representing 100 FINIX and 100 SIX tokens.
1 LP token = 1 FINIX + 1 SIX
Someone trades 100 FINIX for 100 SIX.
Someone else trades 100 SIX for 100 FINIX.
The FINIX/SIX liquidity pool now has 100.2 FINIX and 100.2 SIX.
Each LP token is now worth 1.002 FINIX + 1.002 SIX.
To make being a liquidity provider even more worthwhile, you can also put your LP tokens to the , while still earning your 0.2% trading fee reward.