Liquidity Pools

Users who contribute liquidity to the pool are called Liquidity Providers (LPs). Each Liquidity Providers needs to add equal values to both sides of the liquidity pool (e.g. Deca/BNB) to increase the total amount of liquidity in the pool.

A portion of the transaction fees in the pool will be rewarded to liquidity providers, and LP tokens will be issued to LPs to represent their contributions and shares in the pool.

If no one is adding liquidity to the tokens you want to swap/trade, or if there is not enough liquidity in the pool, it will be difficult, expensive or even impossible for you to swap/trade token pairs.

LP Token

When dedicated tokens are put into the fund pool, the liquidity of the pool will increase, and users will receive pledge certificates as a return for the fund pool. The pledge certificate is an LP token.

Participants can obtain LP tokens by depositing two dedicated tokens (example: Deca/BNB) into the liquidity pool.

The main function of LP token is to participate in DecaSwap's yield farming and earn income.