Liquidity Pools

Exchange V3

In the new Exchange V3, liquidity will be managed in the form of non-fungible positions. You will still earn a share in the fees while providing liquidity.

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

Liquidity pools allow you to provide liquidity by adding your tokens to liquidity pools.

When you add your token to a liquidity pool, you will receive Liquidity Pool (LP) tokens.As an example, if you deposited VR and USDC into a liquidity pool, you would receive VR-USDC LP tokens.

The number of LP tokens you receive represents your portion of the VR-USDC liquidity pool.

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

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

It’s not all bad for liquidity providers as you will also be given a reward in the form of trading fees. For example, whenever someone trades MM Finance, the trader pays a 0.25% fee, of which 0.17% is added to the liquidity pool of the swap pair they traded on.