Liquidity Pools

When you add your token to a Liquidity Pool you will receive Liquidity Provider (LP) tokens and share in the fees.

LP Tokens

As an example, if you deposited OBOS and MATIC into a Liquidity Pool, you'd receive OBOS-MATIC LP tokens.

The number of LP tokens you receive represents your portion of the OBOS-MATIC 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 Oboswap, 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 OBOS and 10 MATIC tokens.

  • 1 LP token = 1 OBOS + 1 MATIC

  • Someone trades 10 OBOS for 10 MATIC .

  • Someone else trades 10 MATIC for 10 OBOS.

  • The OBOS/MATIC liquidity pool now has 10.017 OBOS and 10.017 MATIC .

  • Each LP token is now worth 1.00017 OBOS + 1.00017 MATIC .

To make being a liquidity provider even more worth your while, you can also put your LP tokens to work whipping up some fresh yield on the OBOS Farms, while still earning your 0.17% trading fee reward.

Impermanent Loss

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

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