Liquidity Pools

When you add your token to a Liquidity Pool you will receive Liquidity Provider (LP) tokens and share in the fees.

LP Tokens

As an example, if you deposited BTT and TRX into a Liquidity Pool, you'd receive BTT-TRX LP tokens. The number of LP tokens you receive represents your portion of the BTT-TRX Liquidity Pool. You can also redeem your funds at any time by removing your liquidity.

Liquidity Providers earn trading fees

Providing liquidity gives you a reward in the form of trading fees when people use your liquidity pool. Whenever someone trades on TORRSwap, the trader pays a 0.25% fee, of which 0.17% is added to the Liquidity Pool of the swap pair they traded on. For example;

• There are 10 LP tokens representing 10 TRX and 10 BTT tokens.

• 1 LP token = 1 TRX + 1 BTT

• Someone trades 10 TRX for 10 BTT.

• Someone else trades 10 BTT for 10 TRX.

• The TRX/BTT liquidity pool now has 10.017 TRX and 10.017 BTT.

• Each LP token is now worth 1.00017 TRX + 1.00017 BTT.

To make being a liquidity provider even more worth your while, you will be able in the future to stake the LP tokens and earn extra yield while still earning your 0.17% trading fee reward.

Providing liquidity is not without risk, as you may be exposed to impermanent loss.

“Simply put, impermanent loss is the difference between holding tokens in an AMM and holding them in your wallet.” - Nate Hindman​