Liquidity on V1

Users can utilize the 'Earn' function on the DeriW platform to provide liquidity. Liquidity providers earn fees from leverage trading, borrowing fees and swaps.

Overview

LP functions as a repository of assets utilized in swaps and leveraged trading. It is generated by leveraging any index asset and can be liquidated to retrieve any index asset. The cost for generation and liquidation is determined by dividing the total value of assets in the index, accounting for both profits and losses from open positions, by the supply of DLP.

Buying LP​

LP tokens can be bought using the Earn page.

Options to bridge funds to buy the tokens can be found at the bottom of the Earn page.

Any of the LP index tokens can be used to buy LP, a list of the index tokens can be found on the Pool Data page.

After buying your LP tokens will automatically be staked and you will start earning tokens and other rewards. You can check your rewards on the Earn page.

Selling LP​

LP tokens can be sold on 'My Positions' on the Earn page.

Token Pricing​

There may be a spread for some index tokens, minting LP will be based on the lower value of the index token and redeeming LP will be based on the higher value of the index token.

For stablecoin tokens, the spread will be from the Chainlink price of the stablecoin to 1 USD.

The price of LP tokens will depend on the spread of the tokens in the pool as well.

LP Returns

LP Returns will be based on:

• Profit and loss of the capital pool + income from handling fee sharing

• Fund pool profit and loss distribution: The distribution rules are based on the actual staked amount to distribute profits and losses.

Guide

Risks

Prudence is advised when engaging with smart contracts or blockchain applications. Despite efforts to minimize risks through thorough testing, audits, and bug bounties, the potential for vulnerabilities in smart contract code always exists.

An indicative list of risks includes:

• Smart Contract Risks

• Counterparty Risks: The LP pool serves as the counterparty to traders, and any profits made by traders impact the value of the LP pool.

• Token Risks: Bridged tokens are reliant on the security of the bridge, while pegged tokens carry the risk of depegging.