Quickstart - LP
Put your assets to work!
Liquidity providers are the backbone of decentralized exchange. Anyone can become a liquidity provider by depositing into liquidity pools on Zuit.
Discover Pools
Explore the pool list on Zuit, the total deposited value (Liqudity or TVL) and its APR (Annual Percentage Rate) are transparent.
For example, a pool of 10% APR means depositing funds for 1 year will receive 10% in return. Depositing $10,000 will receive $1,000 rewards per year.
What are rewards?
APRs are generated by trading fees through the pool. The pool will charge a small trading fee from every swap through the fee.
Boosted rewards (points or tokens) will be added for some pools. A lighting bolt icon will be showing beside its APR.
Risks
While earning trading fees, providing liquidity does come with the risk of Impermanent Loss (IL).
Impermanent loss happens when you provide liquidity to a liquidity pool, and the price of your deposited assets changes compared to when you deposited them. The bigger this change is, the more you are exposed to impermanent loss. In this case, the loss means less dollar value at the time of withdrawal than at the time of deposit.
LP Tokens
By providing liquidity, you will receive Liquidity Pool (LP) tokens. These LP tokens track pro-rata shares of the pool reserves and can be redeemed for the underlying assets at any time.
Trading Fees
Zuit protocol will charge a trading fee for all trades. The trading fee is 0.3% for Base Pools, where the liquidity providers collect 0.07%, and the protocol collects 0.03%.
That means liquidity providers will earn 0.07% of all trades in the pool. For example, in a trade of 100,000 USDC, 70 USDC are added to the liquidity pool and can be collected by liquidity providers.
ETH and wETH
WETH is a special version of ETH that has more capabilities. And USDC/ETH and USDC/WETH are the same pool. You can choose either ETH or WETH to collect when withdrawing from the pool.
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