Liquidity Pools on STONfi

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[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.

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