Liquidity Pool

Concept

The liquidity pool allows users to contribute USDC tokens in exchange for Dexodus Liquidity provider (DXLP) tokens. For example, if each DXLP token was initially valued at 0.10 USDC, a user adding 1,000 USDC to the pool would receive 10,000 DXLP tokens.

Value Acquisition

As transactions occur in the platform, losing positions contribute to filling the liquidity pool with additional USDC funds. Additionally, borrowing fees used to support leverage (see Fees for more information) and liquidated positions due to insufficient collateral also go directly to the liquidity pool. As the reserve within the pool increases, so does the value of the DXLP token, as it represents a percentage of the total funds in the pool.

Notably, thanks to our auto-compound feature, the USDC that enters the liquidity pool immediately becomes available to traders. This functionality allows providers to generate returns passively without requiring active participation in the pool or the protocol.

Security Measures

To avoid the abuse of this functionality, liquidity providers will not be able to withdraw their funds during the first 24 hours after investing and will be encouraged to keep their funds as long as possible by reducing their withdrawal fee the longer their funds have been deposited.

Monitoring

In the Liquidity Pool section, providers can actively monitor the fluctuation of DXLP token prices in real time. This is intended to help them decide which strategies to execute.

Summary

Our liquidity pool offers straightforward yet powerful mechanisms for liquidity providers to contribute to the pool, passively accumulate rewards through auto-compounding, easily monitor their investment, and eventually withdraw their assets at an appreciated value.