Liquidity
Last updated
Last updated
Ever wondered what makes trading on H2 Finance so seamless? It's all thanks to liquidity pools—the communal crypto reserves that keep everything running smoothly! Think of them as giant vaults filled with tokens, where users like you contribute to keep the trading ecosystem thriving.
Each pool holds a pair of tokens, like the dynamic duo of CRO and ETH. By supplying tokens to a pool, you become a Liquidity Provider (LP) and earn a share of the trading fees whenever someone swaps tokens in that pool. It's a win-win: smooth trades for users, happy swappers, and rewarded LPs!
H2 Finance offers both V2 and V3 liquidity pools, each with unique benefits:
These distribute liquidity evenly across all price ranges, making them an excellent choice for stable pairs or those new to liquidity providing.
These allow LPs to concentrate liquidity within specific price ranges, potentially maximizing returns when price movements are expected.
With the flexibility of both V2 and V3 pools, you can choose the option that best aligns with your trading strategy and risk tolerance, giving you more control over your liquidity provision journey.
Check out the next article for more information!
