Liquidity Pool
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allow you to provide liquidity by adding your tokens to liquidity pools.
When you add your token to a liquidity pool you will receive Liquidity Pool (LP) tokens.
As an example, if you deposited BEANSTALK and BNB into a liquidity pool, you would receive BEANSTALK-BNB LP tokens.
The number of LP tokens you receive represents your portion of the BEANSTALK-BNB liquidity pool.
You can also redeem your funds at any time by removing your liquidity
It’s not all bad for liquidity providers as you will also be given a reward in the form of trading fees. Whenever someone trades BeanSwap, the trader pays a 0.2% 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 BEANSTALK and 10 BNB tokens.
1 LP token = 1 BEANSTALK + 1 BNB
Someone trades 10 BEANSTALK for 10 BNB.
Someone else trades 10 BNB for 10 BEANSTALK.
The BEANSTALK/BNB liquidity pool now has 10.017 BEANSTALK and 10.017 BNB.
Each LP token is now worth 1.00017 BEANSTALK + 1.00017 BNB.
Providing liquidity is not without risk, as you may be exposed to impermanent loss.
To make being a liquidity provider even more worth your while, you can also put your LP tokens to work whipping up some fresh yield on the , while still earning your 0.17% trading fee reward.
