- Liquidity providers get proportionally 0.3% of the value of each transaction in pools where they provide liquidity, in the form of PSWAP tokens
- An additional 2.5 million PSWAP tokens are allocated daily as a special strategic bonus across users that provide more than 1 XOR of liquidity in a liquidity pool (in addition to liquidity provider fees; rewards are vested over time and the share of the strategic rewards goes up the longer you provide over 1 XOR of liquidity in a pool)
- XOR-ETH, XOR-DAI, XOR-VAL, and XOR-PSWAP pools have 2x weights for the strategic PSWAP reward bonus
Pool is a Verb
Polkaswap is a DEX that aims for boundless liquidity. The unique tokenomics of XOR make certain swaps infinitely liquid, as the token supply can expand and retract based on the needs of the market, like waves traveling across a pool on a hot summer’s day.
At the very heart of Polkaswap are liquidity pools. Pools are made of pure liquidity, where liquidity providers actively participate in trades by providing the tokens used in all swaps. Pooling is thus an action and it’s important work, for which there is a handsome reward. Without liquidity providers pooling with style and freedom, Polkaswap would not be the oasis of liquidity that it is now.
Pool with Style and Freedom
Pooling has risks and you should definitely read about impermanent loss before pooling, but if you learn to master and mitigate these risks, then there are significant opportunities.
A liquidity pool consists of two assets, for example XOR and ETH. Liquidity providers add an equal value of the two assets to a pool, then, when swaps happen in the pool, the price users pay for the swap is determined by the ratio of the two assets (You can read the article “Liquidity in Crypto” in case you don’t understand what liquidity means). Your percentage of ownership in the pool is determined by the ratio of liquidity deposited, to the total amount of that pool.
Thanks to Polkaswap’s unique AMM characteristics, providing liquidity is very simple and rewarding. Liquidity providers are given 0.3% of the value of every trade as transaction fees. Additionally 2.5 million PSWAP are allocated daily as a special strategic reward to liquidity providers that provide at least 1 XOR of liquidity in a pool. Liquidity provided in XOR-ETH, XOR-DAI, XOR-VAL, and XOR-PSWAP pools are entitled to double rewards for this special bonus!
Let’s dive in!
When you access the Pool section on Polkaswap, you have two options, you can either add liquidity to an existing pool or you can create a pool (if it doesn’t exist for a given token pair yet) of your own.
If you are adding liquidity, it is as simple as picking your pairs, setting the amount of tokens to be pooled, and choosing the slippage tolerance (or the percentage you will allow the price to change unfavorably before the transaction is reverted, in case others trade into the pool while you are adding liquidity).
Once you have provided liquidity to a pool, you will be able to see your stats on the main pool menu. These stats include the pooled pair, the amount of tokens pooled and your share of the pool.
From this menu you can also add and remove liquidity from your pool (using a convenient slider to select the percentage of liquidity you want to remove).
One of the differences between creating a pair and adding liquidity to an already existing pool is that your liquidity pair will set the price for the pool, once you have created it, then others will be able to join you in adding liquidity to the pair. New pairs can only be created if the pool does not already exist for the two tokens.
It is also important to mention that if you have a high volume of trades (at least 500 with more than 1 XOR, excluding Transaction and Liquidity Provider fees) in a “block month” (every 432k blocks) you will qualify for Market Maker Rebates.
Liquidity Provision Rewards
If you have provided liquidity, you are entitled to a reward in the form of fees gained from Liquidity Provision. Rewards are paid out approximately every 24 hours for each pool. You can claim PSWAP earned from the pool you participated in.
Claiming these rewards is as simple as signing the transaction and claiming (after paying a network fee for the transfer).
Polkaswap makes it simple and intuitive to trade and pool with style and freedom! And in case you are unsure about what you are doing, you can hover your cursor over the shaded i icon for a quick explanation on the option you have selected. You can also join the Polkaswap Telegram community where we will be happy to help you.
If you need more information on how to pool or have issues connecting your wallet, check out the Wiki article on adding and checking liquidity on Polkaswap.
About SORA, Polkaswap, and Fearless Wallet
SORA is a new economic system aimed at creating a supranational, world economic system with built-in tools for decentralized finance (DeFi). The SORA network implements a new way of parachain architecture on Polkadot and Kusama network, with the capability to bridge external blockchains (like Ethereum) to the Polkadot ecosystem.
One of the DeFi applications that will run on the SORA network is Polkaswap, a non custodial liquidity aggregating, cross chain AMM DEX designed uniquely for the Polkadot ecosystem with boundless liquidity through its one-of-a-kind Aggregate Liquidity Technology (ALT).
Fearless Wallet is a mobile wallet designed for the decentralized future on the Kusama and Polkadot networks, with support for iOS and Android platforms. An awesome user experience, fast performance, and secure storage for your accounts. Fearless wallet will integrate Polkaswap for easy, decentralized swaps of assets.