Soi's liquidity pools allow anyone to provide liquidity by adding their assets to the pool. Coming soon.
Liquidity pool explanation:
When you add to a pool you will receive Liquidity Provider tokens (LP tokens). For example, if a user deposited $SOI and $USDC into a pool, you would receive SOI-USDC LP tokens.
These tokens represent a proportional share of the pooled assets, allowing a user to reclaim their funds at any point. Every time a user swaps between $SOI and $USDC, a 0.25% fee is taken on the trade. 0.22% of that trade goes back to the LP pool. 0.03% of that goes to SOI staking.
- Previously, if there were 100 LP tokens representing 100 USDC and 100 SOI, each token would be worth 1 USDC & 1 SOI.
- If one user trades 10 USDC for 10 SOI, and another traded 10 SOI for 10 USDC, then there would now be 100.022 USDC and 100.022 SOI.
- This means each LP token would be worth 1.00022 USDC and 1.00022 SOI now when it is now withdrawn.