Liquidity Pools

When you add your token to a Liquidity Pool you will receive Liquidity Provider (NTF-LP) tokens and share in the fees (β‰ˆ12% - 30% more than the competitors).

NTF-LP Tokens

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.

Liquidity Providers earn trading fees

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.

For example:

  • 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.

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Impermanent Loss

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

β€œSimply put, impermanent loss is the difference between holding tokens in an AMM and holding them in your wallet.” - Nate Hindman

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