Liquidity pools
This page describes the intended design, not shipped software. The only behaviour live on-chain today is synthetic position creation. The $TRANT token, bonds, staking, liquidity pools and mining, trading, liquidation, and oracle mechanics described across these pages are specified but not built or deployed. See Technical overview.
A liquidity pool is a pair of tokens locked in a smart contract. Instead of matching a buyer to a seller, the protocol's automated market maker (AMM) trades directly against the pool: it always holds inventory on both sides, which is what lets swaps settle instantly and keeps slippage low. TRANT's AMM can swap any ERC-20, including synthetics.
What a pool pairs
A TRANT pool typically holds one of:
- a synthetic and the collateral it is minted against: the market people use to enter and exit that synth; or
$TRANTand a collateral asset, the market for the token itself.
Both sides are held 50/50 by value. As trades move the balance, the AMM re-prices the pair so the pool stays roughly balanced.
Providing to a pool
Say you want to commit $20,000 to a pool. You deposit $10,000 of each token and receive that pool's LP tokens, a claim on your share of the reserves. From there you can:
- hold the LP tokens and collect a proportional share of the trading fees the pool earns; and
- stake them for liquidity mining to earn
$TRANTon top.
Redeem the LP tokens at any time to take back the underlying pair. See Providing liquidity for the step-by-step, and Risks for impermanent loss.