Liquidity Pools

TaalSwap users can provide liquidity by putting their paired tokens (e.g., TAL and ETH) into liquidity pools. Users are eligible to receiving LP (liquidity pool) tokens by adding their tokens to a liquidity pool. For example, if a user deposits TAL and ETH into a liquidity pool, he/she will receive TAL-ETH LP tokens in return. The amount of these LP tokens represents the claimable stake of TAL-ETH pool, and the user can swing the fund back to his/her wallet anytime he/she wants.

Liquidity providing is not totally risk-free because the user may experience the so-called ‘impermanent loss’, which roughly means the price difference between tokens in an AMM pool and tokens in a wallet.

Liquidity providers will receive a reward in proportion to their staking ratio of the pool that they joined. This means that whenever a trader swaps tokens on TaalSwap, he/she pays a 0.25% of fee, of which 0.17% is added to the liquidity pool and is in turn used for rewarding its liquidity providers.

Being a liquidity provider can be even more worthwhile when he/she puts LP tokens to a TaalSwap farms to get some some fresh yield, while still earning a portion of 0.17% trading fee reward.