Liquidity Pools and Adding Liquidity
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allow 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 0.2% fee, of which 0.15% 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 100.15 FINIX and 100.15 SIX.
Each LP token is now worth 1.0015 FINIX + 1.0015 SIX.
To make being a liquidity provider even more worth your while, you can also put your LP tokens to the , while still earning your 0.15% trading fee reward.