STON.fi: The Ultimate Guide
  • How to use this guide and why stars
  • What is blockchain and cryptocurrency
  • What is DEX and how it works
  • What is a crypto wallet
  • How to create a TON wallet
  • Where to find your wallet address
  • How to connect your TON wallet to STON.fi
  • How to buy TON (Toncoin) in Telegram
  • How to swap (exchange) tokens on STON.fi
  • ★ Transaction parameters: what is price impact, exchange rate, blockchain fee, minimum received
  • ★ What is liquidity pool
  • ★ How to evaluate a liquidity pool (TVL, APR, trading volume)
  • ★ How to provide liquidity on STON.fi
  • ★ How to withdraw funds from a liquidity pool
  • ★ What is farming?
  • ★ How to farm on STON.fi
  • ★ How to withdraw funds from farming
  • ★ How to get referral fees from swaps?
  • ★★ Staking on STON.fi
  • ★★ Liquidity provision, farming, and staking — what's the difference?
  • ★★ Blockchain and DEX fees
  • ★★ Impermanent loss
  • ★★ How to create a new liquidity pool
  • ★★ How to add (import) your own token with a contract address
  • ★★ Liquidity pool types
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  • Where do tokens come from in the liquidity pool?
  • Can I also provide liquidity and receive a percentage of the fees?

★ What is liquidity pool

Learn what liquidity pools are on STON.fi, how they facilitate instant trades, and how liquidity providers get a percentage of transaction fees. Discover how to provide liquidity for rewards.

A liquidity pool is a kind of "reservoir with cryptocurrencies", or more precisely — two scales, where an equal amount of tokens is on each side in terms of value. These liquidity pools are managed by DEX smart contracts: during a swap, the required amount of Token A is taken from one side of the scale, and the amount of tokens given by the trader, Token B, is placed on the other side. The liquidity pool ensures that transactions are executed as quickly and safely as possible: users do not need to wait for someone with the required amount of tokens — the assets are always available in the liquidity pool. Without funds in the liquidity pool, there would be nothing to trade.

Where do tokens come from in the liquidity pool?

They are deposited there by liquidity providers because it can be useful. Often, token creators, by adding their token to DEX for trading, themselves provide liquidity — otherwise, no one would be able to buy it. Trading is impossible without liquidity pools, and therefore, the operation of DEX itself. Liquidity providers earn income — they receive a percentage for each transaction within the pool. On STON.fi, this is 0.2% of the transaction amount. These 0.2% are distributed among all liquidity providers in proportion to their share in the pool (for example, whoever provided 50% of all liquidity will receive half of 0.2% of each transaction in that pair).

Can I also provide liquidity and receive a percentage of the fees?

Of course! We will talk about this in the following chapters. But remember that liquidity provision must be balanced on both sides of the scale — which means you will need to choose the right liquidity pool and acquire both tokens from the pair in the required volume.

We remind you that within this guide, we provide information in a simplified form, omitting some details and generalizing the principles of DEX operation.

Previous★ Transaction parameters: what is price impact, exchange rate, blockchain fee, minimum receivedNext★ How to evaluate a liquidity pool (TVL, APR, trading volume)

Last updated 1 month ago