what’s liquidity pool?
In the DeFi sector, a liquidity pool is a vibrant gathering location of token pairs or token/stablecoin pairs or even sometimes triplets or quadruplet sets of digital assets. In essence, they are digital marketplaces where assets are locked in a smart contract that traders can buy and sell at a specific price.
These markets are the handiwork of the “Automated Market Maker” – or “AMM” for short – mechanism developed by a decentralized platform. For these bodies (DeFi), this is a jump to expanding their spear of effect, bringing in money and liquidity, and becoming a DEX. Here at CrowdSwap, we’ve already managed to morph into a DEX and bring the AMM feature online. As of now, one new liquidity pool called the EDAT/USDC is one well-received practical example of our sweat and blood, with many more coming.
What Are The Newest Additions to the CrowdSwap Liquidity Pool list?
Two new pools, the CROWD/MATIC and CROWD/USDC, will be out and ready for everyone on Friday, Feb 17th. They have been on the slow burn from Feb 12th through 17th, but it’s time for them to wake up for the public release.
These two will showcase enormous APY rates and incentives on release but can be susceptible to change. Hopefully, they will get a lot of attention off the bat, the same as the EDAT/USDC pool. They are also worthy candidates to walk side by side with the CROWD Mining opportunity and two potent pools to swap MATIC and USDC for CROWDs for future events.
Besides the abovementioned points, why does everyone enjoy these pools so much? Besides the income, of course! Let’s take a closer look.
Why Are CrowdSwap’s Liquidity Pools Popular?
Early on, we focused on the term “specific price” at the beginning, which is a stand-alone value for tokens/coins in every liquidity pool. This means that traders sometimes have the option to trade assets at lower values and costs compared to other markets; an arbitrage trading chance!
The same goes for our liquidity pools. We offer liquidity pools jammed with promising tokens or coin pairs with pre-evaluated stable-foot projects backing them. In our pools, traders enjoy the benefits of sometimes-lower market prices not easily reachable in the open crypto space. Another incentive of our liquidity pools is the accumulative incomes (compound rates, and incentives go to people interested in a pool’s opportunities. Liquidity farming is a prime example of getting a passive income from a liquidity pool, especially one as lucrative as ours.
CrowdSwap’s Liquidity Pool Lifespan
Every CrowdSwap pool, no matter how great and beneficial, has a peak, a downward slope, and continuous mild normalcy.
We carefully select steady-foot projects and spread the baseline for reliable liquidity pools with enticing APY rates and farming incentives to operate. That said, some of these incomes won’t last for eternity as CrowdSwap’s liquidity pool lifespan high-incentive era comes to a halt around 200 days post-launch.
The phrases “lifespan” and “come to an end” sometimes spread misunderstandings and confusion amongst the community about the reality of liquidity pools and how they work. Let’s clear this unclarity in one bullet-proof statement:
“After the supposed lifespan, a liquidity pool is still viable and functional. However, the farming incentives are turned off and farmers no longer receive incentives for adding liquidity to the market, drastically lowering their income. From this point onward, users with liquidity in the pool will only receive their share of trading
What Happens to Rewards at The End of 200 Days?
At the end of the high-incentive pool lifespans, rewards won’t be automatically joggled into wallets. Users have to do this themselves and withdraw when they deem it necessary. Also, whether or not a farmer intends to keep his share and keep on piling up on that share in the pool is their choice; since there will be no more farming incentives to have.
“Remember, after the reduction of the overall incentives, the trading fees will still continue to be transferred to farmers.”
What Do We Think about the CROWD/USDC and CROWD/MATIC Pools?
If we had a penny for each time somebody asked us this on our different social media platforms, we’d definitely be opening two new pools right away.
Jokes aside, we don’t know how well these two very intriguing CrowdSwap liquidity pools will fair. It all comes down to you and the community in which we have always placed our faith.
As a consolidation, and like always, we’ll put anything in our power behind these pools, constantly developing them and keeping them smooth and going for all of you.
We can say, with certainty, that they’re good marketplaces to trade other assets for CROWD, which will become handy later in the LTH season 2 program.