Adding liquidity allows the contributor to earn 0.25% swapping fees from the pairs they've provided. You can supply liquidity and start earning fees via adding liquidity here. Your liquidity can earn even more rewards (dSKULL) if they're staked at farms!
When you've provided liquidity, you will receive sLP tokens (Skull Liquidity Provider tokens) as proof of contribution. For example, if a user deposited $SKULL and $FTM into a pool they would receive SKULL-FTM sLP tokens. These tokens represent a proportional share of the pooled assets.
These sLP tokens can be staked at farms to earn dSKULL. We have many options for you to stake, the most diverse farms on Fantom chain.
How a pool accrues value from fees
If at the time of a trade, there are 100 sLP tokens representing 100 FTM and 100 SKULL, each sLP token would be worth 1 FTM and 1 SKULL.
If one user trades 10 FTM for 10 SKULL, and another traded 10 SKULL for 10 FTM, then there would now be 100.02 SKULL and 100.025 FTM in the pool.
This means each LP token would be worth 1.00025 FTM and 1.00025 SKULL when it is withdrawn.
Adding liquidity to an existing pool
You need to provide tokens in a 1:1 value ratio to the liquidity pool. This means that if you are adding to, say, a Skull-FTM pool, and wish to provide 2000 FTM worth of liquidity, you would need to convert approx 1000 FTM to an equal value of Skull tokens first via our Swap.
Adding liquidity to a new pool
If the pool you wish to provide liquidity to does not exist, you can create it of course! Just provide the tokens and off you go. As the first liquidity provider, you set the initial exchange ratio (price) if one of the tokens in the pair does not exist yet on SkullSwap. This often quickly corrects itself through arbitrage and by more liquidity providers adding to the pool.