Guide for LPs

This page describes core benefits of Liquorice for liquidity providers

Collateralized loans limited to selected borrowers

Safety of LP capital is secured through overcollateralization similar to other DeFi lending protocols. At the same time, access to LP capital is given to a limited number of carefully selected trading firms. This largely reduces the risks of possible hacks and exploits which may occur in lending pools with generalistic purpose.

Extra yield linked to trading activity

LPs earn time based fee applied to borrowed capital and also a share of trading volumes coming through the system. This intoduces an extra incentive for liquidity provision as LPs are rewarded based on trading activity.

Direct exchange of LP tokens

A liquidity provider may submit an order through native Liquorice RFQ engine to exchange LP tokens for any supported crypto. This feature combines withdrawal of capital and tokens exchange into one transactions saving gas and time. It also helps during times of high pools utilization to withdraw capital as borrowers are incentivized to facilitate such requests to earn extra yield.