[1] | The Other Side of a DEX
Many people use a DEX for its main purpose, which is swapping tokens. However, there is another crucial aspect, especially on the $TON blockchain, which involves the users who supply the liquidity that powers these swaps.
[2] | The Basics of Providing Liquidity
In short, participants provide tokens of equal value to a liquidity pool. In return, they get a small portion of every trade that occurs in that pool, typically a fee of 0.01% to 0.2%. This is distributed among all providers based on their share of the total value locked.
[3] | Earning Potential
This small percentage from swaps can translate into considerable annual returns for those providing liquidity. The APR can vary widely, from just a few percent to much larger figures.
[4] | Arbitrary Provision
A key feature on STONfi is Arbitrary Provision. This means you don't have to manually swap tokens to get the correct ratio before adding liquidity. You can choose a pool and start with just one coin from the pair, and the smart contracts will handle the rest automatically.
[5] | Farming for Extra Rewards
Farming is another option available on selected pools. It provides a fixed daily reward to liquidity providers, which is separate from the pool's base trading fees. To participate, you select a pool with Farming on STONfi and, after providing liquidity, you lock your LP-tokens in a specific smart contract.
[6] | Protection with IL Offset
Currently available for the STON/USDT pool, the IL Offset mechanism fully protects against impermanent losses for price changes up to 2x, covering a specific percentage of the pool's TVL. The compensation, up to a set value in STON tokens, is processed automatically for all participants.
