What is a liquidity swap

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The liquidity swaps available on Cryptorg are linked to Binance swaps and have identical metrics.

Binance Liquid Swap is an automated market maker (AMM) through which platform users will be able to invest their coins into a common pool to form liquidity and earn a percentage return. In addition, they will earn income from trading commissions for transactions that involve Binance Liquid Swap funds

How Liquid Swap Works

Essentially, pool participants act as liquidity providers, thereby ensuring price stability and low transaction fees, regardless of size. There are always two coins in the pool.

The transaction fee and exchange rate between crypto-assets in the pool at Liquid Swap depends on how many coins are placed there In other words, by adding or removing coins from the pool, traders can influence its value as well as the cost of transactions.

In our system the pools are divided into two blocks:

  1. Stable Pools. Users receive an average reward of 7% to 15% p.a. (APY) in USDT, USDC, BUSD, DAI, for which they need to place funds in the pool for a minimum of seven days. At the same time, all coins placed on the platform are automatically converted into two crypto-assets from the pool. These pools are characterized by a high degree of reliability, as the value of both coins in the pair is practically unchanged.
  2. Innovative pools. Remuneration in such pools can range from tens to hundreds of % annual return (APY) in various world currencies, stabelcoins and cryptocurrencies. However, negative returns can also form. Why might this happen?

Implem ental loss

Let’s look at the EUR/BUSD pool as an example. We are investing in BUSD.
In fact, we invested dollars and part of them was exchanged for euros. And if, on forex, the dollar starts to grow against the euro, then that part that we have in the pool, exchanged into euros, starts to bring a minus. The more the dollar rises against the euro, the greater the minus may be.

Therefore, in this regard, for maximum stability, you can choose pools where different dollar stackcoins are traded against each other.

Consider another situation for the same pool.
The euro begins to grow. We gain additional profit. Since we already exchange our EUR for more BUSD when we remove a share.

For stabelcoin/crypt pairs the movements relative to each other will lead to even larger local minuses or pluses. In fact, there are already included elements of trading, in addition to earnings on pool commissions