Why do I receive rewards from staking? This is compensation for taking on additional risks. Staking tokens is equivalent to locking them away for a period of time . You are paid for this action because you renounce your ability to sell the tokens, and exit the investment.
Read moreHow do you calculate pool liquidity tokens?
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 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!
Read moreWhy do LP tokens lose value?
Impermanent loss (IL) is the risk that liquidity providers take in exchange for fees they earn in liquidity pools . If IL exceeds fees earned by a user when they withdraw, it means the user has suffered negative returns compared with simply holding their tokens outside the pool.
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