Liquidity Providers

What are liquidity providers?

Liquidity Providers can provide liquidity to the different perpetual pools.

Liquidity providers participate in the profit and loss of the AMM of that pool. Profit and loss is paid in the pool token such as USDC.

How can you provide liquidity?

Liquidity can be provided in different ways:

• D8X frontends hosted by White-label partners have a vault that allows liquidity provision
• The D8X Futures Node SDK provides functions to add and remove liquidity
• Smart contracts can also directly tap into the liquidity provision functions of D8X smart contracts

See onboarding on how to get started.

When providing liquidity, you will be issued a corresponding amount of pool share tokens named after the pool token but prefixed with a d (such as dUSDC, dbUSD, ...). The pool share token is a liquid token that you can send to your frens or grandma, or there might even be a staking pool to give you some extra yield. If you want to exchange the pool share token (such as dUSDC) back into your liquidity provision token (such as USDC), you initiate the withdrawal in a first step. After a fixed cool down period (usually 24 hours), you can execute the withdrawal in a second transaction. Careful, once you initiate a withdrawal, you can no longer transfer the pool share token. When you execute the withdrawal after the cool down period, your pool share tokens are being burnt, and you get your share of liquidity provision tokens back.