When you add your token to a Liquidity Pool, you will receive Liquidity Provider (LP) tokens and share in the fees.
As an example, if you deposited SELF and BNB into a Liquidity Pool, you'd receive SELF-BNB LP tokens.
The number of LP tokens you receive represents your portion of the SELF-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 SMBSwap, the trader pays a 0.25% fee, of which 0.17% is added to the Liquidity Pool of the swap pair they traded on.
- There are 10 LP tokens representing 10 SELF and 10 BNB tokens.
- 1 LP token = 1 SELF + 1 BNB
- Someone trades 10 SELF for 10 BNB.
- Someone else trades 10 BNB for 10 SELF.
- The SELF-BNB liquidity pool now has 10.017 SELF and 10.017 BNB.
- Each LP token is now worth 1.00017 SELF + 1.00017 BNB.
To make being a liquidity provider even more worth your while, you can also stake your LP tokens on the SELF farms, while still earning your 0.17% trading fee reward.