In short, yield farming protocols incentivize liquidity providers (LP) to stake or lock up their crypto assets in a smart contract-based liquidity pool. These incentives can be a percentage of transaction fees , interest from lenders or a governance token (see liquidity mining below).
Read moreCan I stake LP tokens?
LP is the assurance token that proves that you invested in the smart contract of the corresponding liquidity pool. You can stake your LP tokens to get extra profit in WX token , to do so, open Waves. Exchange app, login to your account and navigate to the Pools tab. Select a pool from the list and click on it.
Read moreWhat happens when you stake LP tokens?
The LP tokens become your claim to your share of the pool’s assets . Holding these LP tokens allows you total control over when you withdraw your share of the pool without interference from anyone — even the Balancer platform.
Read moreHow do you earn LP tokens?
Crypto owners will receive LP tokens when they contribute an equal amount of tokens to a pool . These tokens represent their stake in that pool. These LP tokens will be minted when adding funds to the pool. They are then burned when removing the funds.
Read moreWhat is LP staking?
LP Staking is the process by which you transfer your tokens to blockchain maintenance in exchange for Rewards in the form of new tokens . In simple words — you “deposit” your tokens and receive Rewards on top of them.
Read moreHow do LP tokens earn yield?
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 moreWhat is LP token farming?
Unlike Syrup Pools, Farms require you to stake two tokens to get LP Tokens, which you then stake in the Farm to earn rewards . This lets you earn CAKE while still keeping a position in your other tokens!
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