Pools

Marmelade Finance allow you to provide liquidity by adding your tokens to liquidity pools or “LPs”.

When you add your token to a liquidity pool (LP), you will receive FLIP tokens (Marmelade version of liquidity provider tokens).

As an example, if you deposited $MARMEL and $BUSDinto a liquidity pool, you would receive MARMEL-BUSD FLIP tokens.

The number of FLIP tokens you receive represents your portion of the MARMEL-BUSD 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. “Simply put, impermanent loss is the difference between holding tokens in an AMM and holding them in your wallet.” - Nate Hindman

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 Marmelade, 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 FLIP tokens representing 10 MARMEL and 10 BUSD tokens.

• 1 FLIP token = 1 MARMEL + 1 BUSD.

• Someone trades 10 MARMEL for BUSDT.

• Someone else trades 10 BUSD for 10 MARMEL.

• The MARMEL/BUSDT liquidity pool now has 10.017 MARMEL and 10.017 BUSD.

• Each FLIP token is now worth 1.00017 MARMEL + 1.00017 BUSD.

To make being a liquidity provider even more worth your while, you can also put your FLIP tokens to work whipping up some fresh yield on the MARMEL farms (here), while still earning your 0.17% trading fee reward.