Liquidity pools are one of the foundational technologies behind the current DeFi ecosystem. They are an essential part of automated market makers (AMM), borrow-lend protocols, yield farming, synthetic assets, on-chain insurance, blockchain gaming – the list goes on.
To be able to let RealtyDAO complete their multi faceted ongoing features, liquidity for the rDAO token should be provided and in return liquidity providers will be provisioned with LP tokens. You can always redeem or withdraw stake to your liquidity at any point in time.
What's in it for you?
1. You will receive liquidity pool tokens or LP tokens.
2. You will also receive a certain amount of free rDAO tokens which will be given away monthly on RealtyDAO.
What are LP Tokens?
LP tokens represent a share of a liquidity pool and can be exchanged for that percentage of underlying tokens. You can turn your LP tokens back into the underlying tokens at any time by hitting the ‘Remove’ button (you can also add more underlying assets at any time by hitting the ‘Add’ button).
TIP: Uniswap is an “automated market-making” (AMM) protocol. Market making is done automatically via smart contracts, but requires people around the world to provide the assets for the algorithm to make markets with. When you pool assets to add liquidity, you are contributing your assets to this process. The ratio of assets always rebalances to be 1:1 in terms of the value they can be swapped for (it is equal-weighted) and until something changes Liqiduty providers always get 0.30% of fees.
HOW TO PROVIDE LIQUIDITY TO RDAO TOKEN
Essentially there are two basic steps in providing liquidity and become a member of rDAO's governing community.
1. You need to have an equal proportion of rDAO token and ETH. ( To buy rDAO check out this link)
2. Add a comfortable amount to the AMM platform.