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Liquidity Pool Investment

How does a Liquidity Pool work?

Providing a trustless smart contract, which always holds an equal value in both assets.

Adding funds to the pool, creates new pool-tokens. Those pool-tokens can later be used to withdraw funds again.

The pool-token holder earns the pool-taker and pool-withdraw fee.

How much does a Liquidity Pool earn?

The total earning is highly dependent on:

  • Taker fee
  • Taker volume
  • Withdraw fee
  • Withdraw volume
  • Extra payout by project

Can I only add one asset to the Liquidity Pool ?

No, both assets are needed for deposit.

How save is investing in a Liquidity Pool ?

As save, as the assets in the pool. When one asset of the pool reaches zero value, the poolen token does the same.

In which Liquidity Pool should I invest?

We can not answer this question here, but important criterias are:

  • Asset quality
  • Pool activity
  • Extra payout
  • Pool size

Where can I use Liquidity Pools ?

How can I combine a Liquidity Pool with a Market Pegged Asset (MPA) ?

Liquidity Pools, which use a MPA/Collateral pair, can be used to stake a long, neutral or short position.

Example: 1.19.66 – HONEST.BTCBTSMM
  • HONEST.BTC Long – BTS Short: Sell 50% of the BTS for the HONEST.BTC part.
  • HONEST.BTC/BTS Neutral: Borrow the 50% HONEST.BTC and add an extra 50% BTS.
  • HONEST.BTC Short – BTS Long: Use all BTS for borrowing. Sell 50% of your HONEST.BTC for the BTS part.