2. How does Liquidity Pool Works? Most AMM and liquidity pool uses the constant product formula which is x * y = k . This is the formula that mathematically determines what the market price of the token in the pool should be.
Read moreHow is liquidity pool APR calculated?
Calculating LP Reward APR
Read moreHow is LP price determined?
It is a decentralized exchange (DEX) where anyone can provide liquidity by depositing a token pair of 50-50 ratio inside it. There are no order books and the price is determined by the constant product formula: x * y = k .
Read moreHow does staking LP tokens work?
LP token staking Providing liquidity requires staking equal values of different tokens, which generates a LP token . This new LP token is then staked in a new pool in order to earn a yield.
Read moreHow are LP tokens calculated on PancakeSwap?
1 LP token = 1 CAKE + 1 BNB . Someone trades 10 CAKE for 10 BNB . Someone else trades 10 BNB for 10 CAKE.
Read moreHow are LP token amounts calculated?
For example, if you contribute $10 USD worth of assets to a Balancer pool that has a total worth of $100, you would receive 10% of that pool’s LP tokens . You receive 10% of the LP tokens because you own 10% of the crypto liquidity pool. The LP tokens become your claim to your share of the pool’s assets.
Read moreHow much is a LP token worth?
And from all of this info we can calculate that 1 LP token in the LINK-ETH pool on Uniswap is valued at $577.69 .9 Şub 2021
Read more