Tag: What is LP token

How to Create a Liquidity Pool

Each Uniswap liquidity pool is a trading venue for a pair of ERC20 tokens. When a pool contract is created, its balances of each token are 0; in order for the pool to begin facilitating trades, someone must seed it with an initial deposit of each token.

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 PancakeSwap, the trader pays a 0.25% fee, of which 0.17% is added to the Liquidity Pool of the swap pair they traded on .