🍯Liquidity Pools

Exchange V2

The upcoming Exchange V2 will introduce a novel approach to liquidity management through non-fungible positions. As a liquidity provider, you will continue to receive a portion of the fees earned, but in the form of LP tokens. When you contribute tokens to a liquidity pool, you will be rewarded with LP tokens, which entitle you to a proportionate share of the fees.

V2 of the exchange introduces new features that give liquidity providers greater control over their liquidity deployment. When adding your token to a liquidity pool in V2, you will now create a new non-fungible liquidity position that comes with unique settings. These liquidity positions are represented by transferable NFTs that indicate ownership of the underlying assets and earned trading fees.

Unlike in previous versions, trading fees in V2 will no longer be automatically compounded in the position. Instead, you will need to manually claim them from each position's detail page. Additionally, you can redeem your funds by removing your liquidity at any time.

Active liquidity and price ranges

V2 allows liquidity providers to customize their positions to provide liquidity only when the trading price is within a specific range. If the price moves outside that range, the position becomes inactive and consists of only one type of token in the pair.

Inactive positions do not earn any trading fees and do not participate in trading activities.

Concentrated liquidity

Due to the ability of liquidity providers to focus their token deposits on providing liquidity within a specific price range, V2 can facilitate much larger trades with the same amount of underlying assets. This leads to a significantly higher relative liquidity level compared to V1. Additionally, liquidity providers can generate higher trading fees using the same amount of capital.

Earning Trading Fees

When you provide liquidity to a pool on Peerblue, you earn trading fees as a reward whenever someone uses that pool to complete a swap. For each hop or swap in each liquidity pool in Exchange V2, depending on the fee tier of the pool, traders pay a fee ranging from 0.01% to 0.1%.

(Need an example here)

PBEX Tokens

To further increase the benefits of being a liquidity provider, you can utilize your liquidity positions to generate additional yield through PBEX Farms, all while continuing to earn rewards from trading fees.