MOCKTAILSWAP LIQUIDITY POOL & FARMING ll PART-3
Hello everyone, welcome back to another part of the mocktailswap project review. I am Alamin. I hope you guys are well. Today I will explain the liquidity pool (LP) features of the mocktailswap project. I hope you guys will love to check out this project.
ABOUT MOCKTAILSWAP LP:
MocktailSwap is Binance Smart Chain’s decentralized swap solution. We provide a platform for the development of a completely secure and fast decentralized token exchange system. MocktailSwap Pools allows you to provide liquidity by putting your tokens in a liquidity pool, also known as an "LP."
A liquidity provider (LP) contributes money to the liquidity pool. A Liquid Pool can be assumed of as a large pile of money that can be exchanged with traders. Liquidity provider receives a fee from the transactions that occur in their pool in exchange for providing liquidity for the logs. In the case of Uniswap, LP deposits the equivalent of two tokens, such as 50% ETH and 50% DAI, in the ETH / DAI pool.
It is extremely simple to add funds to the liquidity pool. The protocol determines prices. For example, Uniswap v2 charges a 0.3 percent fee for traders who open LP immediately. Other platforms or forks may charge lower fees to entice more liquidity providers to join their pool.
What is the significance of attracting liquidity?
Because of how AMM works, the less liquidity in the pool, the less slippage that can lead to large orders. This, in turn, can attract more traffic to the platform, and so on.
Slip issues probably depend on the AMM design, but they must be considered. Keep in mind that prices are set by an algorithm. It is simple to predict how the ratio of tokens in the liquid pool will change following the transaction.
A large slip occurs when the ratio changes due to a large difference.
Assume you want to purchase all of the ETH in the ETH / DAI pool from Uniswap. You simply cannot! You’ll have to pay exponentially higher premiums for each additional ether, but you’ll never be able to buy the entire batch. Why? This is due to the equation x * y = k. The equation is no longer valid if x or y is zero, indicating that there is no ETH or DAI in the set.
However, that is not the entire story of AMM and the liquidity pool. Another factor to consider when providing liquidity to AMM is volatile lossess
The process of Liquidity Pool and Adding Liquidity in MocktailSwap:
When you add your tokens to the liquidity pool (LP), you will be rewarded with FLIP tokens (MocktailSwap’s version of liquidity provider tokens).
If you deposit $ MOK and $ BNB in liquidity, for example, you will receive FLIP MOK-BNB tokens.
Your share of the MOK-BNB liquidity pool is represented by the number of FLIP tokens you received. You can also redeem your money by erasing your liquidity at any time.
Liquidity provision is not without risk, as you may incur permanent losses. Simply put, volatile losses are the cost of storing tokens in AMM versus storing them in your wallet. Nate Hindman’s formal name is Nate Hindman.
It’s not all bad news for liquidity providers, because you get paid in the form of trading fees. When a trader uses MocktailSwap, they pay a 0.2 percent fee, of which 0.17 percent is added to the liquidity pool of the swap pairs they traded.
The ability to sell or buy an asset without having a significant impact on the market price is referred to as liquidity. It also has something to do with how simple it is to convert assets into fiat currency. Assets or assets that are difficult to convert into cash are not liquid, whereas those that can be converted immediately are. And Moc can be used for transactions. Swap through liquidity pools with MoctailSwap.
In my next article, I will explain about mocktailswap process or many more. Wait for it thanks for your patients.
To know more information & all upcoming update news about this I strongly suggest everyone check out their official handle.
Author: Al-amin Ahsan
Btt username: Imran232
Btt profile link:
BSC Address: 0x55bA9c90c37e3206570AC9dc872c0f053d155F77
I am not a financial advisor This Article is for informational purposes. I don’t suggest anyone invest in any project. If you want to do then do your research. Your money your research your risk.