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Liquidity Pool
When you add liquidity to the pool, you will get LP tokens. A transaction fee of 0.2% will be charged when someone makes a token swap. 0.15% will be returned to liquidity providers as a fee reward. The liquidity pool will also allow you to stake your LP tokens to earn BSW tokens in the “Farms”. Hence, apart from earning income from token swap transactions, a user can stake LP tokens and earn BSW tokens.
For instance, if you add liquidity to $BNB / $BUSD, you will receive BNB-BUSD LP tokens. The number of LP tokens you receive represents your share in BNB-BUSD liquidity pool. You can always request the withdrawal of your funds by removing your liquidity.
Please note that when adding liquidity, you will need to have a sufficient amount of each token. Let’s say you want to add the following liquidity: 1 BNB / 308 BUSD. If you have less than 308 BUSD or less than 1 BNB, you will not be able to proceed. You need to have a sufficient amount of each token.
Keep in mind that providing liquidity is subject to impermanent loss and may carry certain risks. Make sure you know all the pros and cons of providing liquidity before taking any action. You can learn more about impermanent loss by clicking here.
Last modified 20d ago