LP Pools

How?

To initiate a pool on OneVerse Swap, a user must seed it with an initial deposit of each token. The first liquidity provider is incentivized to deposit an equal value of both tokens to set the initial price of the pool. Any divergence from the current market rate creates an immediate and profitable arbitrage opportunity.

Once a pool is created, any liquidity provider can add to it by depositing tokens proportional to the current price. This is done to prevent the liquidity provider from being arbitraged.

What you receive:

In OneVerse Swap, unique tokens known as liquidity tokens are minted and sent to the provider's address whenever liquidity is deposited into a pool. The proportion of the pool's liquidity provided determines the number of liquidity tokens the provider receives. If the provider is minting a new pool, the number of liquidity tokens they will receive will be determined by an algorithm that considers the amount of each token provided.

How to earn rewards:

Whenever a trade occurs on OneVerse Swap, a fee is charged to the transaction sender. This fee is distributed pro-rata to all liquidity providers in the pool upon completion of the trade.

To retrieve the underlying liquidity and any fees accrued, liquidity providers must "burn" their liquidity tokens, effectively exchanging them for their portion of the liquidity pool plus the proportional fee allocation.

Further Info:

As liquidity tokens are themselves tradable assets, liquidity providers may sell, transfer, or otherwise use their liquidity tokens in any way they see fit.

OneVerse Swap offers a decentralized and secure trading experience that prioritizes privacy, censorship resistance, and security. Its liquidity pools provide a unique way of facilitating trades that does not rely on intermediaries or require permission from third parties.