Not only do liquidity pools offer traders access to decentralized liquidity, they also offer investment opportunities to those wishing to stake assets in the liquidity pool. When a user swaps assets through a liquidity pool, a very small fee is paid to the individuals who are providing the liquidity. To put this in common TradFi terms, those who contribute capital to the liquidity pools essentially earn a fee similar to that of a market maker. Liquidity pools, especially new ones, offer very high yields to investors. This concept is called yield farming, and provides income opportunities for those who understand the concept.
Related posts
-
Solana (SOL) ETF Applications Look Like Bets on Trump Retaking White House, Making U.S. Friendlier to Crypto
“Given that CME-traded solana futures don’t currently exist, it seems the only viable path for spot... -
Bitcoin Price (BTC) Could Drop to $55K as Crypto Closes Weak Quarter
Anticipation of the spot bitcoin ETF approval, then the approval, and then the massive inflows into... -
Elections Across Europe Won’t Hinder Blocs’ Crypto Ambitions, MiCA
The Czech Republic, Republic of Cyprus, Estonia, Netherlands, Poland, Slovakia and Spain held elections last year....