Liquidity Provider Benefits

Liquidity providers (LPs) benefit from several key features of the StableSwap model, which is designed to optimize returns while minimizing risks.

Trading Fee

LPs earn a portion of the trading fees generated within the pool. The optimal fee rate is around 0.05% per trade, which contributes to the overall yield for LPs.

Multi-Asset Pools

BitFLUX supports pools with multiple assets, allowing LPs to diversify their holdings and reduce exposure to any single asset's volatility. This helps stabilize returns and provides more consistent yield.

Efficient Capital Utilization

The use of an amplification coefficient allows the pool to behave more like a constant-sum invariant when balanced, reducing slippage and making capital more efficient. This means LPs can provide liquidity with less risk of impermanent loss compared to other AMMs.