Liquidity Pool

Liquidity Pools act like storage spaces for tokens, which we sometimes call liquidity. They're used for making trades in a decentralized and open way. When you put tokens into these pools, you need to divide them equally between two types of tokens: the main one and the base one.

In BaseXchange, we have our own liquidity pools where users can provide their tokens to facilitate trading. As a token of appreciation for their participation, liquidity providers are rewarded with $BEX tokens. For example, if someone deposits $BEX and $ETH tokens into a pool, they will receive BEX-ETH LP tokens, representing their share in the pooled assets. These LP tokens function like tickets and can be redeemed for the underlying assets at any time.

The number of tokens you get depends on how much of the pool's tokens you put in. If you're making a new pool, the number of tokens you'll get is figured out using a formula: sqrt(x * y). Just remember, x and y are the amounts of the two types of tokens you put in.