Providing Liquidity

To the Trade Pool.

Each user can add liquidity of polar tokens to the Trade Pool and receive a portion of the liquidity fee that users pay for swaps. To do this, the user needs to buy WHITE and BLACK tokens for the same amount. Next, the user can add the purchased tokens to the Trade Pool on the Earn page in the Add Liquidity tab. In return, the liquidity provider will receive a certain number of PTPT tokens (Polars Trade Pool Tokens), which will reflect its weight in the total liquidity of the Trade Pool. You can study the impact of the volatility of the aggregate price of polar tokens on profitability for liquidity providers in this article.

Users who swap WHITE and BLACK tokens in the Trade Pool always pay a liquidity fee of 0.3% for each transaction made. 70% of all liquidity fees paid are distributed among liquidity providers who have added their liquidity to the Trade Pool. It does this by evenly increasing the weight of the available PTPT tokens. This means that when a liquidity provider returns PTPT tokens back to the Trade Pool on the Earn page, Remove Liquidity tab, it will return more WHITE and BLACK tokens to itself than it originally added. This amount will include the starting amount, Impermanent loss / gain, and the accrued liquidity fee.

Previously, the Trade Pool contained 3 tokens. But we reworked the arbitrage model, and settled on a more reliable and stable version with 2 tokens. More on this in this article: https://polarsio.medium.com/polars-trade-pool-update-nov-2021-3a108caad403

Additionally, liquidity providers can add their PTPT tokens to the Farming Smart-Contract and receive farming rewards for providing liquidity of polar tokens to the Trade Pool. Users can add tokens obtained as a result of pharming to fundamental staking and receive rewards that will depend on the trading volume on the Polars platform.