DeFi

Liquidity Pools: How to Earn Trading Fees

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1 min read

Decentralized Exchanges (DEXs) don't have a central bank or company providing cash. They rely on Liquidity Pools.

Be the Bank

By depositing pairs of tokens (e.g., ETH + USDC) into a pool, you become a Liquidity Provider (LP).

Earn Fees: Every time someone trades against the pool, they pay a fee (e.g., 0.3%). This fee is distributed to LPs.
The Catch: Impermanent Loss.

It depends on volume. High volume = high fees.

Simulate your potential returns with the Liquidity Pool Calculator.

Try our official Liquidity Pools to run the numbers yourself and optimize your portfolio.

Deep dive into liquidity pools and how to mitigate the risks of impermanent loss.

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