Liquidity Pools

Liquidity pools 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 called TOON-LP.

As an example, if you deposited TOON and SUPRA into a liquidity pool, you would receive TOON-SUPRA LP tokens.

The number of LP tokens you receive represents your portion of the TOON-SUPRA liquidity pool.

You can also redeem your funds at any time by removing your liquidity.

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

It’s not all bad for liquidity providers as you will also be given a reward in the form of trading fees. For example, whenever someone trades ToonSwap, the trader pays a 0.25% fee, of which 0.12% is added to the liquidity pool of the swap pair they traded on.

For example:

• 10 LP tokens are representing 10 TOON and 10 SUPRA tokens.

• 1 LP token = 1 TOON + 1 SUPRA

• Someone trades 10 TOON for 10 SUPRA

• Someone else trades 10 SUPRA for 10 TOON .

• The TOON/SUPRA liquidity pool now has 10.012 TOON and 10.012 SUPRA.

• Each LP token is now worth 1.0012 TOON + 1.0012 SUPRA.

To make being a liquidity provider even more worth your while, you can also put your LP tokens to work