Liquidity Pool

Liquidity refers to the availability and depth of assets on a decentralized exchange. In an AMM decentralized exchange, liquidity is provided by liquidity providers who lock their tokens into smart contracts. The higher the liquidity, the easier it is for users to buy or sell tokens at fair market prices without significantly impacting the asset's value. Adequate liquidity ensures smooth trading and minimizes slippage. By supplying liquidity to a pool, you receive a reward in the form of trading fees whenever individuals utilize your liquidity pool for conducting swaps.

When individuals execute trades on BiophiliaSwap, they are required to pay fees for each swap made within the Exchange Liquidity Pool. The fee amount varies based on the liquidity pool fee tier and falls within the range of 0.01% to 1%. The fee rates and breakdowns are displayed as follows: