π | Liquidity Pools
Last updated
Last updated
Liquidity Pools are collections of tokens which have been locked by smart contracts at the request of their holders.
On Unlimited Leverage, liquidity pools are used in a trustless bankroll model, rather than to provide trade liquidity. This means:
Pools earn a percentage of the fees accrued
Pools are used to pay out the profits of profitable trades
This is a well-established model within both the DeFi and cryptocurrency gambling ecosystems.
As a result, the amount you earn as a liquidity provider is based on the fees earned combined with the overall profit & loss of the traders using the relevant trading pair.
Please note, providing liquidity can entail a risk of unrealised loss in assets if trader profitability exceeds the fees earned by a pool.