Liquidity Providers

Revenue Sources

As a liquidity provider, you earn revenue from four primary sources:

• 100% of liquidated collateral from positions that get liquidated

• 100% of trader losses when positions close at a loss

• 100% of hourly borrow fees paid by traders (calculated as a percentage of total position size, not just the borrowed amount)

• Percentage of opening fees charged when traders open new positions (this percentage is configurable and may be adjusted in the future)

How Liquidity Provision Works

When you deposit assets as collateral, you receive LP tokens in return that represent your share of the pool. To withdraw your funds, you'll need to deposit these LP tokens back to the protocol.

Withdrawal Process

You can withdraw your liquidity anytime when sufficient assets are available in the pool. However, there may be scenarios where all assets are currently lent out to traders, temporarily preventing withdrawals.

If assets aren't immediately available for withdrawal, you can submit a withdrawal transaction. Your funds will be automatically sent to your wallet as soon as sufficient assets become available in the pool.

Automatic Compounding

You begin earning profits immediately upon depositing liquidity. All earned profits are automatically redeployed into the protocol, increasing your potential returns through compound growth without requiring any additional action from you.