🚀 Liquidity Providers & What They Earn

⚫️ The recent months have been particularly eventful for The Open Network ecosystem. The launch of several DEXs and buzz around some tokens have led to the growth of DeFi popularity among the TON community.

⚫️ Many users have already become familiar with DeFi projects on TON. Still, today we would like to delve a little deeper into such an important component of any decentralized exchange as liquidity.

⚫️ As soon as you add a trading pair to the pool (e.g., JTON/SCALE), you receive LP tokens, namely Liquidity Provider tokens. Each LP has a token value equal to the tokens you contributed to the liquidity.

⚫️ The number of tokens in the pool grows over time. Of course, there are nuances — read about impernament losses.

⭐️ As earning depends on the exchange's commissions, you will make good money if:
— The daily turnover of the trading pair is high.
— Your pool share is relatively large.
— Tokens have been in the pool for some time.

⚫️ For instance: DeDust.io liquidity providers receive 0.5% of each transaction in the SCALE/JTON and BOLT/JTON pairs. Based on this proportion, you get a percentage of your share in the pool. That is, if your share in the liquidity pool is 20%, you'll receive 0.1% of the commissions retained by the exchange. (This is an approximate calculation and NOT an investment recommendation; the exchange and pair are taken for example purposes).

⚫️ In the end, we would like to thank our friends at @scaleton_university for their assistance in preparing this text. Their channel already features several must-read articles that DeFi-lovers will undoubtedly find interesting.

@thedailyton