Liquidity Pools

LP Token

For example, if you deposit IDS and BNB into the Liquidity Pool, you will receive IDS-BNB LP tokens. The number of LP tokens you receive represents your share of the IDS-BNB Liquidity Pool. You can also redeem your funds at any time by clearing your liquidity.

Liquidity Providers earn trading fees

Providing liquidity rewards you in the form of trading fees when people use your liquidity pool. Whenever someone trades on Indoswap, the trader pays a 0.25% fee, of which 0.17% is added to the Liquidity Pool of the swap pairs they trade. As an example:

There are 10 LP tokens representing 10 IDS tokens and 10 BNB. 1 LP token = 1 IDS + 1 BNB Someone trades 10 IDS for 10 BNB. Someone else traded 10 BNB for 10 IDS. The IDS/BNB liquidity pool now has 10,017 IDS and 10,017 BNB. Each LP token is now worth 1,00017 IDS + 1,00017 BNB.

To make liquidity providers more valuable to your time, you can also use your LP tokens to generate some new returns on IDS Farms, while still earning your 0.17% trading fee reward.

Irregular Losses

Providing liquidity is not without risk, as you may be exposed to non-permanent losses. Learn more about Variable Losses here.