When you add your token to a Liquidity Pool you will receive Liquidity Provider (NTF-LP) tokens and share in the fees (≈12% - 30% more than the competitors).
As an example, if you deposited NTF and BNB into a Liquidity Pool, you'd receive NTF-BNB LP tokens.
The number of LP tokens you receive represents your portion of the NTF-BNB Liquidity Pool.
You can also redeem your funds at any time by removing your liquidity.
Providing liquidity gives you a reward in the form of trading fees when people use your liquidity pool.
Whenever someone trades on NativeSwap, the trader pays a 0.25% fee, of which 0.19% is added to the Liquidity Pool of the swap pair they traded on.
- There are 10 NTF-LP tokens representing 10 NTF and 10 BNB tokens.
- 1 LP token = 1 NTF + 1 BNB.
- Someone trades 10 NTF for 10 BNB.
- Someone else trades 10 BNB for 10 NTF.
- The NTF/BNB liquidity pool now has 10.020 NTF and 10.020 BNB.
- Each LP token is now worth 1.00020 NTF + 1.00020 BNB.
To make being a liquidity provider even more worth your while, you can also put your NTF-LP tokens to work whipping up some fresh yield on the NTF Farms, while still earning your 0.19% trading fee reward.
Providing liquidity is not without risk, as you may be exposed to impermanent loss.