Liquidity Pool

Getting rewards by providing Liquidity

What Are Liquidity Pools?

Liquidity pools play a critical role in enabling users to make trades in a decentralized and permissionless manner. These pools allow users to pool their tokens, or liquidity, so that others can use them for trading. To create a liquidity pool, users must equally divide the supplied amount between two coins: the primary token and the base token. Duckstail offers users the ability to provide liquidity to these pools and earn DUCK-LP tokens (Duckstail Liquidity Provider tokens) as proof of providing liquidity. For example, if a user deposits DKO and USDT into a pool, they would receive DKO-USDT LP tokens, which represent a proportional share of the pooled assets. These tokens allow users to withdraw their funds at any point.

What are the Fees?

Whenever a pool is used for trading between DKO and USDT, a 0.25% fee is taken on the trade. Of that fee, 0.17% is returned to the LP holders, 0.08% to team treasury and towards DKO buyback and burn . Our goal is to maintain the lowest possible fees while still providing lucrative rewards for liquidity providers. This approach is essential to ensure the sustainability and health of the Decentralized Exchange.

How to provide liquidity?

To provide liquidity, users need to select the pair of tokens they want to provide. If the pair doesn't exist yet, they can create a new one by selecting the two tokens they want to provide liquidity for. The DEX will automatically generate the pool for this pair. Enter the amount of one token you want to add. The DEX will calculate the equivalent amount of the other token based on the current exchange rate. Before adding liquidity, users may need to approve the DEX to spend their tokens. This usually involves a separate transaction on the blockchain and will require a small fee. Once approved, they can add liquidity by confirming the transaction. This will also require a gas fee. After the transaction is confirmed on the blockchain, they will receive LP (Liquidity Provider) tokens representing your share of the pool.