Pool
Liquidity pools constitute one of the fundamental mechanisms of Vordex, allowing users to exchange assets in a decentralized and efficient manner while liquidity providers (LPs) earn passive income through swap fees and protocol rewards.
Types of Liquidity Pools on Vordex
The two types of liquidity pools maintained by Vordex serve different trading strategies and liquidity needs. Volatile Pools: ✔️ Most suitable for volatile assets (for instance, ALPH-USDT, VEX-ALPH). ✔️ Uses the formula x × y ≥ k that defines price movements based upon favorable supply or demand. ✔️ While it may have higher return potential, it's accompanied by higher risk due to considerations of price movements. The other one is Stable Pools: ✔️ These pools are designed for assets that are too correlated or pegged (e.g., USDT-USDC). ✔️ Stable pools build on the formula x³y + y³x ≥ k, which greatly reduces slippage and preserves price stability. ✔️ These are for stable coins or assets that would intend to maintain a somewhat pegged exchange rate. Differences in Pool Types: ✔️ Volatile pools give a more exposure to movements in the market and a lot more chances of return. ✔️ Stable pools cater purposes on reduced-cost transactions and minute price slippage. ⚠️ At the moment, stable pools have to be created by the Vordex team according to request to ensure they're done right and avoid mistakes.
Creating and managing liquidity pools
🔹 Creating a Pool
✔️ Anyone can create a liquidity pool on Vordex. ✔️ There is no limit to the number of pools for a given asset pair. ✔️ Pools with the highest liquidity, best trading rates, and most rewards will be prioritized in the UI.
🔹 Providing Liquidity
✔️ LPs must deposit assets in a 50/50 ratio for volatile pools. ✔️ Liquidity does not need to be staked or locked—rewards start accruing immediately upon deposit. ✔️ LPs earn swap fees and additional rewards based on the number of votes their pool receives.
Pool staking and governance
Once a pool is added to the whitelist, the Arena will allow staking on that pool, where LPs can earn extra VEX rewards. ✔️ Each pool that gets voted for by veVEX is allocated extra reward emissions. ✔️ Once voted on, tokens from the whitelisted pool can be used as bribes to get more votes. ✔️ These tokens require a second whitelist which permits them to be used for bribing on other pools. In this way, the reward distribution is optimized while the protocol does not have to bear unnecessary tokens.
Why Provide Liquidity on Vordex?
✅ Earn passive income → Share swap fees and receive governance rewards. ✅ Enhance decentralization → By providing liquidity, you improve trading efficiency and accessibility. ✅ Maximize yields → Using veVEX voting and attracting bribes can increase returns. ✅ Security and transparency → All transactions are executed through audited smart contracts, ensuring fund safety.
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