🌊Liquidity Pools

Put your tokens to work.

Liquidity pools are the backbone of OctoSwap. They consist of funds deposited by users (liquidity providers) into smart contracts. These funds facilitate token swaps, ensuring liquidity is always available for trades. By providing liquidity, you deposit a pair of tokens into a pool and earn LP tokens, which represent your share.

Octo is in love with liquidity.

Users participate in liquidity pools to earn a share of the protocol fees generated from every swap that occurs within the pool. These fees are distributed among liquidity providers based on their contribution to the pool, allowing users to earn passive income. The potential earnings are often expressed as APR (Annual Percentage Rate), which gives an estimate of the returns over a year. However, liquidity providers should be aware of impermanent loss, a risk that occurs when the value of the deposited tokens changes relative to each other. Despite this, by providing liquidity, users not only earn rewards but also support the overall DeFi ecosystem by maintaining efficient and reliable trading on the platform.