Xion Finance Wiki
Liquidity Pools
Deposit xDAI or BNB & XGT to earn trading fees
Time to become a liquidity provider(LP) on a multitude of chains.
Where you earn up to 0.3% on every swap traders execute on XGT paired liquidity pools. To become a liquidity provider, simply add 50% xDAI or BNB and 50% XGT of your crypto holdings into the XGT/xDAI (Gnosis Chain) or XGT/BNB (BNB Chain) pool and in return earn swapping fees. You can think of a liquidity pool as a big pile of funds that traders can trade against and in return for providing liquidity, you will earn fees from the trades that happen in the xDAI/XGT pool.
Here is an example:
  • Bob wants to deposit his $100 worth of xDAI and $100 worth of XGT
  • He connects his Torus wallet and scrolls to the heading "Add liquidity to earn trading fees"
  • Enters in 100 xDAI and clicks "USE YOUR XGT" to add his $100 worth of XGT
  • Clicks "Add Liquidity" & approves 2 transactions to add his funds to the pool
  • He receives liquidity pool tokens called UNI-V2, that now represents his deposit + any accrued trading fees. This is displayed in a USD amount under "Earnings Balance"
  • Every time a trader swaps xDAI <> XGT, they pay a 0.3% fee. This fee is immediately distributed amongst all the liquidity providers in the pool, including Bob. Depending on how much he deposited, is what percentage of fees he will earn
We make use of AMMs(Automated Market Makers) known as Honeyswap and Uniswap. An AMM works similarly to an order book exchange in that there are trading pairs – for example, xDAI/XGT. However, you don’t need to have a counter-party (another trader) on the other side to make a trade. Instead, you interact with a smart contract(liquidity pool) that β€œmakes” the market for you.
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