Liquidity Pools

A liquidity pool is a collection of tokens locked in a smart contract. These tokens are provided by liquidity providers, who deposit equal values of two tokens (e.g. ALEO and USDC) into the pool.Liquidity providers earn a portion of the trading fees generated by swaps in the pool. The more liquidity a provider supplies, the greater their share of the fees. This provides an incentive for users to contribute liquidity and help maintain an efficient, liquid market.

Providing liquidity gives you a reward in the form of trading fees when people use your liquidity pool to complete swaps. Whenever someone trades on AlphaSwap, for each hop (swap) in each liquidity pool, the trader pays a fixed 0.3% fee, of which 0.25% is added back to the Liquidity Pool in a form of trading fees.

Providing liquidity is not without risk, as you may be exposed to impermanent loss. "Simply put, impermanent loss is the difference between holding tokens in an AMM and holding them in your wallet." - Nate Hindman

How to Add Liquidity

1. Visit the Liquidity page. Based on your needs and usage preferences, you can choose between public or private to add liquidity. The main difference between public and private adding liquidity is whether the token pair is public or private.

2. Choose the two tokens in the trading pair you want to add liquidity. You can check the LP situation of the different pools through the Info interface to help you decide how to provide LP.

3. Based on the two tokens you have selected, enter the amount of one of the two tokens you would like to add liquidity for. The interface will automatically choose the most popular trading fee tier and configure the price range for you.

4. After you have confirmed all the parameters and inputs, click on the 'Add Liquidity' button, and you will be prompted with a confirmation from your wallet. If you 'Confirm', your swap will be executed.

5. A notification toast will appear that will notify the user once the transaction has been sent and has completed.

6. You can view your transaction history by clicking the history section on the upper right.

How to Remove Liquidity

1. Click the minus button on the position you want to remove liquidity under "My Pools".

2. Use the buttons or slider to choose how much liquidity you want to remove. Choose “MAX” to remove all of your liquidity from this pair.

3. After you have confirmed all the parameters and inputs, click on the 'Remove Liquidity' button, and you will be prompted with a confirmation from your wallet. If you 'Confirm', your action will be executed.

4. A notification toast will appear that will notify the user once the transaction has been sent and has completed.

Liquidity Settings

1. Public/Private Pools: Pools selector to select Public or Private Pools.

2. Input Token 1 Wallet balance: AlphaSwap detects the input token balance in your wallet.

3. Max amount: Shortcut buttons to quickly input Max of the balance amount.

4. Input Token 1: Token selector to select token to add liquidity.

5. Input Token 1 amount: Specify the amount of input token 1 to add liquidity.

6. Input Token 2 amount: Specify the amount of input token 2 to add liquidity. For the two tokens, if you input one token amount, the system will automatically output the other one based on the appropriate ratio.

7. Input Token 2 Wallet balance: AlphaSwap detects the input token balance in your wallet.

8. Input Token 2: Token selector to select token to buy or swap to.

9. Action - Add Liquidity: Once you have confirmed all the parameters, LFG!

1. My Pools: The liquidity that I have previously provided.

2. Add/Minus: The buttons you can add/minus your current liquidity.

1. Liquidity removed percentage: Use the buttons or slider to choose how much liquidity you want to remove.

2. Input Token amount: Specify the amount of input token to remove liquidity.Choose “MAX” to remove all of your liquidity from this pair.

3. Action - Remove Liquidity: Once you have confirmed all the parameters, LFG!