Mon. Oct 25th, 2021
    LP token, Wiki

    LP (Liquidity Pool) is a token given to the user by a decentralized financial platform, such as a cryptocurrency exchange or a loan service, for replenishing the liquidity pool. Moreover, the more the amount is provided to the platform for exchange, the more LP-tokens will be in return.

    This is a kind of digital receipt that the liquidity pool owes certain money that was borrowed. You can withdraw liquidity at any time: LP-tokens will be withdrawn from the account, and in return you will get back the originally invested funds.

    Advantages

    • Ease of use: unlike ordinary receipts tokens can be divided, preserving all properties.
    • Additional income: LPs can be invested in farming pools.
    • They can be donated, sold, etc.

    The rate of LP tokens can be tracked on popular platforms, for example Coinmarketcup, Coingecko, Coincost.

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