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  • Liquidity Providers earn trading fees
  • Impermanent Loss

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.

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Last updated 2 years ago

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