Liquidity Pools

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

LP Tokens

To give you an example, if you deposited DEFC and BNB into a Liquidity Pool, you'd receive DEFC-BNB LP tokens.

The number of LP tokens you receive represents your portion of the DEFC-BNB Liquidity Pool. You can also redeem your funds at any time by removing your liquidity.

Liquidity Providers earn trading fees

Whenever someone trades on DefiSwap, the trader pays a 0.25% fee, of which 0.17% is added to the Liquidity Pool of the swap pair they traded on.

For example:

• There are 10 LP tokens representing 10 DEFC and 10 BNB tokens.

• 1 LP token = 1 DEFC+ 1 BNB

• Someone trades 10 DEFC for 10 BNB.

• Someone else trades 10 BNB for 10 DEFC.

• The DEFC/BNB liquidity pool now has 10.017 DEFC and 10.017 BNB.

• Each LP token is now worth 1.00017 DEFC+ 1.00017 BNB.

You can also put your LP tokens to work on the DEFC Farms, to make being a liquidity provider even more worth your while and still earn your 0.17% trading fee reward.

Impermanent Loss

Do remember, that by providing liquidity is not without risk, as you may be exposed to impermanent loss.