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Liquidity Pools and Adding Liquidity
RHITH liquidity pools allow you to provide liquidity by adding your tokens to liquidity pools or β€œLPs”.
When you add your token to a liquidity pool (LP), you will receive LP tokens (RHITH version of liquidity provider tokens).
As an example, if you deposited $RHITH and $BNB into a liquidity pool, you would receive RHITH-BNB LP tokens.
The number of LP tokens you receive represents your portion of the RHITH-BNB 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. Whenever someone trades RHITH, the trader pays a 0.25% fee, of which 0.18% is added to the liquidity pool of the swap pair they traded on.
For example:
  • There are 10 RHITH LP tokens representing 10 RHITH and 10 BNB tokens.
  • 1 RHITH LP token = $1 RHITH + $1 BNB
  • Someone trades 10 RHITH for 10 BNB.
  • Someone else trades 10 BNB for 10 RHITH.
  • The RHITH/BNB liquidity pool now has 10.017 RHITH and 10.017 BNB.
  • Each LP token is now worth 1.00017 RHITH + 1.00017 BNB.
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 RHITH farms, while still earning your 0.18% trading fee reward.
Last modified 8mo ago
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