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 moreDoes impermanent loss happen if price goes up?
Impermanent loss happens when the price of your token changes after you deposit it in the liquidity pool . From the above example, if the price of ETH goes up to $200, you’ll now be looking at a 1 ETH per 200 DAI exchange rate.
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