Why can you stake LP tokens?

Staking Uniswap is unlike any other form of cryptocurrency staking as you can make a passive income from your ERC-20 tokens by placing them in liquidity pools with Uniswap. To take part in Uniswap liquidity staking, you need ETH and an ERC-20 secure wallet.

Click ‘Zap In’ and select ETH as the input and Uniswap under ‘Swap Via’ . You will see the current pool size, your estimated pool share, and the amount of LP tokens you will receive.

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.

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.

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.

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.