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Pools & Liquidity

Every swap on SUBFROST trades against a liquidity pool: a shared reserve of two tokens that anyone can contribute to. When you provide liquidity to a pool, you deposit a pair of tokens and earn a share of the fees that the pool generates (from people swapping through it).

How it works​

  • A pool holds two assets (for example DIESEL and frBTC). The price adjusts automatically as people trade, so you always have a counterparty.
  • When you add liquidity, you receive an LP position representing your share of the pool.
  • As swaps happen, they pay a fee that accrues to the pool, so your position grows over time.
  • You can withdraw your liquidity (plus accrued fees) at any time by redeeming your LP position.

The swap fee, and what you earn​

On a standard AMM pool a swap pays 1% by default, split two ways:

ShareRateGoes to
Liquidity providers0.8%the pool, so it accrues to your position
Protocol0.2%permanently to the AMM protocol

So on those pools, as a liquidity provider you earn 0.8% of the volume that trades through your pool, in proportion to your share of it.

The BTCUSD pool charges differently

The frUSD/frBTC pool is a CryptoSwap pool, not a standard AMM pool, and the numbers above do not describe it.

Its fee is dynamic between 0.2% and 0.8%, depending on how unbalanced a trade leaves the pool: balanced trades pay the low end, unbalancing trades pay the high end.

Providing liquidity​

  1. Click "Liquidity" on the swap page to add positions to a pool.
  2. On the Add tab, choose the pair you want to provide.
  3. Deposit the two tokens in the pool's ratio. The app fills in the paired amount for you and shows the Minimum Deposit.
  4. Confirm and sign. You now hold an LP position and start earning a share of that pool's swap fees.

Removing liquidity​

  1. Click "Liquidity" on the swap page and switch to the Remove tab.
  2. Choose the LP position you want to remove.
  3. Set the Amount to Remove. The app shows the Minimum Received for each of the two tokens, quoted against current reserves.
  4. Confirm and sign. Your share of the pool, plus the fees it accrued, returns to your wallet.

Next steps​

  • BTCUSD Pool: the frUSD/frBTC pool the warning above is about.
  • FIRE Vault: stake your LP and earn FIRE, or buy FIRE through bonds.
  • Swap: the other side of the pool.