Liquidity Pools

Exchange V3

In the new Exchange V3, liquidity will be managed in the form of non-fungible positions. You will still earn a share in the fees while providing liquidity.

When you add your token to a Liquidity Pool you will receive Liquidity Provider NFT tokens and share in the fees.

Non-fungible liquidity positions

In V3, liquidity providers now have more control over what price range they want to deploy their liquidity. So, when you add your token to a Liquidity Pool in V3, you will create a new non-fungible liquidity position with its unique settings.

Therefore, in V3, liquidity positions are NFTs. Please note that these NFTs are transferable, and they represent the ownership of the underlying assets and the trading fees they earned.

In V3, trading fees will no longer be automatically compounded in the position. You can manually claim them on each of the position detail pages.

You can redeem your funds at any time by removing your liquidity.

Active liquidity and price ranges

In V3, liquidity providers can configure their positions to only provide liquidity when the price is within a certain range. If the trading price moves out of the range, the position will consist of only one type of token in the pair and become inactive.

Inactive liquidity positions will not participate in trading or earn any trading fees.

Concentrated liquidity

In V3, because of liquidity providers can concentrate their token deposits to provide liquidity only within a specific price range. With the same amount of underlying assets, V3 can support a much bigger trade.

It results in a much higher relative liquidity level when compared to V2. And liquidity providers can earn more trading fees with the same amount of capital.

Here is an example:

Baller and Claire both provided liquidity in JIM/USDT pool with $1,000 USD worth of token assets. The current price of JIM is 5 USDT.

Similar to ByteSwap v2, Baller provided his liquidity across the entire price range. Therefore he deposited all of his capital, 500 USDT and 100 JIM.

Claire utilize the new concentrated liquidity feature in ByteSwap v3 and created a position with a price range of 2 to 12.5 USDT per JIM. She deposited 185 USDT and 37 JIM, worth a total of $370. She is now able to spend the remaining $630 elsewhere, like locking JIMin the Syrup pool to enjoy high JIM yield while receiving a series of ByteSwap ecosystem benefits.

As long as JIM stays within the price range of 2 to 12.5, both Baller and Claire will receive the same amount of trading fee rewards while Claire deposited way less capital to the liquidity pool.

Earning trading fees

Providing liquidity gives you a reward in the form of trading fees when people use your liquidity pool to complete swaps.

Whenever someone trades on ByteSwap, for each hop (swap) in each Exchange V3 liquidity pool, depending on the liquidity pool fee tier, the trader pays a fee ranging from 0.01% to 1%. Their fee rates and fee breakdowns are shown as follows:

	0.01%	0.05%	0.25%	1%
Liquidity Provider	67%	66%	68%	68%
JIM Burn	10%	10%	23%	23%
Treasury	18%	19%	9%	9%
Fixed Term JIM Stakers	5%	5%	0%	0%

For example, in a 0.25% fee tier pool:

• Among all the active (in-range) liquidity positions, there are a total of 10 JIM and 10 BEXC tokens.

• Someone trades 1 JIM for 1 BEXC.

• Someone else trades 1 BEXC for 1 JIM.

• The liquidity providers who are in the range providing active liquidity earned a total of 0.0017 JIM and 0.0017 BEXC from the trades.

• Positions with price ranges that are not covering the current price, therefore being inactive, will not contribute to trading or earn any fees.

Earning JIM

To make being a liquidity provider even more worth your while, you can also put your liquidity positions to work whipping up some fresh yield on the JIM Farms, while still earning trading fee rewards.

Exchange V2

LP Tokens

As an example, if you deposited JIM and BEXC into a Liquidity Pool, you'd receive JIM-BEXC LP tokens.

The number of LP tokens you receive represents your portion of the JIM-BEXC Liquidity Pool.

You can also redeem your funds at any time by removing your liquidity.

Earning trading fees

Whenever someone trades on ByteSwap, for each hop (swap) in each Exchange V2 liquidity pool, the trader pays a fixed 0.25% fee, of which 0.17% is added back to the Liquidity Pool in a form of trading fees.

Earning JIM

The old Exchange V2 will be running in parallel with the new Exchange V3. So, some trading pairs will remain on ByteSwap Exchange V2 and have their corresponding V2 Farms. Please check the tags to identify the exchange versions.

Impermanent Loss

Providing liquidity is not without risk, as you may be exposed to impermanent loss.