Today we talk about Liquid Swap and Launch Pool on Binance.com.
Liquid Swap
Liquid swap (LP) is an automated market maker (AMM) to facilitate crypto pair exchange. AMM earns bid ask spread and commission income, and shares the income with liquidity provider.
As an example, when you choose to provide liquidity for USDT/BNB pair, whenever other users trade USDT/BNB, part of their commission fee would be distributed back to you.
Liquidity swap is able to provide investors with high return, as seen below.
To add liquidity, you choose the currency pair, then click add, a new window will be shown.
You can add currency pair, or just add a single currency. If adding currency pair, it will be 1:1 ratio of the two cryptos in the currency pair. This is to make the liquidity pool having the same amount of both cryptos.
By participating in a liquid swap , you become a liquidity provider. Your participated portion becomes a share of the crypto exchange provider. The possible risk is impermanent loss.
Launch pool
It is also called launchpad in Binance.
Basically, a new crypto project is started in launch pool. They use BNB to do the mining. You stake your BNB , and get rewarded with the new token.
That is all for today.
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