🍗Liquidity Pools

Liquidity operation is just like casting a spell (maybe a weeeeee bit more braincell-consuming): at times you get a genie, other times....not so lucky, a dementor. However, in order to 'cast a spell' without turning ourselves into frogs, we first need to know some basic concepts.

🪄Glossary

✨Imagine investing in real-world Hogwarts and earning a share of tuition fees paid whenever a new wizard joins. Same with Liquidity Providers (LP)! Through providing liquidity, one can earn passive income with a share of trading fees rewarded whenever the liquidity pool is used by others. Even better: you are free to redeem whenever you want!

✨Liquidity pools are pools of tokens locked in a smart contract. They are used to facilitate trading by providing liquidity.

✨Liquidity refers to the ease with which tokens can be swapped to other tokens.

✨When depositing tokens in a pool, a liquidity provider receives special LP tokens in exchange, which represent their share in the pool and transaction fees are needed to withdraw the deposited liquidity. It is normally in a form of A/B, which in the above example, would be MGB/CRB.

🔮Trading on the Enchanter Finance

1. To add or remove liquidity, click the pool button on the navigator menu. (of course you need your wallet to be connected)

2. Add liquidity by adding a new position to a specific pool, or creating a new pool.

3. Once you confirm and approve adding the required assets, you'll immediately start earning passive income.

4. Same with removing. After clicking the dropdown button 'Manage', you can remove the amount of LP tokens of your choice. Once confirmed, the two tokens will be sent back to your wallet according to the pool portion and portion composition.