🌊Liquidity Pools

Getting rewards by providing Liquidity

What Are Liquidity Pools?

Liquidity pools play a critical role in enabling users to make trades in a decentralized and permissionless manner. These pools allow users to pool their tokens, or liquidity, so that others can use them for trading. To create a liquidity pool, users must equally divide the supplied amount between two coins: the primary token and the base token.

ARBDEX offers users the ability to provide liquidity to these pools and earn ALP tokens (ARBDEX Liquidity Provider tokens) as proof of providing liquidity. For example, if a user deposits $ARX and $ETH into a pool, they would receive ARX-ETH LP tokens, which represent a proportional share of the pooled assets. These tokens allow users to withdraw their funds at any point.

What are the Fees?

Whenever a pool is used for trading between $ARX and $ETH, a 0.25% fee is taken on the trade. Of that fee, 0.05% is returned to the LP pool and the remaining 0.2% to Real Yield staking pools. Our goal is to maintain the lowest possible fees while still providing lucrative rewards for liquidity providers. This approach is essential to ensure the sustainability and health of the Decentralized Exchange.

How to provide liquidity?

To provide liquidity, users can add a single token to the trading pair, and Zap will automatically perform swaps and balance the trading pair to a 50/50 split before adding liquidity. Users can even add liquidity if the number of tokens they provide is not perfectly balanced with the current pool.

In summary, ARBIDEX liquidity pools enable users to pool their tokens and earn ALP tokens in return. Trading fees are distributed among LP pools to incentivize liquidity providers, and adding liquidity is a straightforward process that can be done with just one token.