Liquidity Pools

When you add your token to a Liquidity Pool you will receive Liquidity Provider (LP) tokens and share in the fees.

As an example, if you deposited HOPE and GDCC into a Liquidity Pool, you'd receive HOPE-GDCC LP tokens.

The number of LP tokens you receive represents your portion of the HOPE-GDCC Liquidity Pool.

You can also redeem your funds at any time by removing your liquidity.

Liquidity Providers earn trading fees

Providing liquidity gives you a reward in the form of trading fees when people use your liquidity pool.

Whenever someone trades on Hopium, the trader pays a 0.25% fee, of which 0.10% is added to the Liquidity Pool of the swap pair they traded on.

For example:

  • There are 10 LP tokens representing 10 Hope and 10 GDCC tokens.

  • 1 LP token = 1 Hope + 1 GDCC

  • Someone trades 10 Hope for 10 GDCC.

  • Someone else trades 10 GDCC for 10 Hope.

  • The Hope/GDCC liquidity pool now has 10.010 Hope and 10.010 GDCC.

  • Each LP token is now worth 1.00010 Hope + 1.00010 GDCC.

To make being a liquidity provider even more worth your while, you can also put your LP tokens to work whipping up some fresh yield on the Hope Farm , while still earning your 0.10% trading fee reward.

Impermanent Loss

Providing liquidity is not without risk, as you may be exposed to impermanent loss.

“Simply put, impermanent loss is the difference between holding tokens in an AMM and holding them in your wallet.” - Nate Hindman

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