What is a DEX KRC20 Liquidity Pool?
A DEX KRC20 liquidity pool is a crowdsourced pool where users deposit pairs of tokens to facilitate trading. These pools power automated market makers (AMMs), eliminating the need for centralized order books or intermediaries. Instead, they enable instant swaps by pulling liquidity from the pool, ensuring trades occur smoothly, even without buyers and sellers being online simultaneously.
How Do Liquidity Pools Work?
When users contribute two assets as a pair (CUSDT/KRC20) to a liquidity pool, they become liquidity providers (LPs). Essentially, these pools facilitate token swaps by allowing users to deposit one token and withdraw its paired counterpart. The larger the pool, the smaller the price impact a user will experience when swapping.
A DEX system automatically adjusts token prices within the pool based on supply and demand, creating a seamless trading experience.
How KRC20 LP REWARDS Work
Chainge offers an attractive reward structure for liquidity providers, making liquidity provision a very lucrative endeavour:
1. Earn a Share of Every Trade
Liquidity providers (LPs) collectively earn a substantial 1.5% fee from each transaction within a specific trading pair’s pool. This fee is distributed to liquidity providers and is proportional to their contributions — meaning the more liquidity you provide, the more you earn.
🚀 Additionally, the higher the trading volume in the pool you’ve added liquidity to, the greater your earnings. By actively promoting trading activity on dapp.chainge.finance for your pooled token, you not only contribute to the pool’s growth but also maximize your own rewards
⚠️ Please be aware that pools on the waiting list do not generate rewards until the token is enabled for trading, as no trading activity occurs beforehand
2. Daily Payouts for Steady Rewards
LP rewards are distributed every day in $CUSDT, ensuring a consistent and predictable stream of income.
3. Timing
LP rewards are distributed on a daily, retroactive basis.
The first reward cycle will be disbursed starting 12:00 AM UTC on Tuesday, October 29th and will be completed by end of day.
Example: A user provides NACHO liquidity and then NACHO has a 24-hour trading volume of $100,000 on Chainge. The LP rewards will be distributed the following day among NACHO liquidity providers and will amount to 1,500 CUSDT
4. Bonus airdrops
Alongside the standard Chainge rewards — derived from trading fees — projects will occasionally contribute their own token rewards as an extra incentive for specific pools.
The first project to do this is $POPKAT. The POPKAT team is contributing 2.69 million $POPKAT as additional incentives for the POPKAT/CUSDT pool. These rewards will be distributed daily, proportional to the liquidity provided by each liquidity provider, over a 14-day period (192k $POPKAT per day)
These additional rewards are provided at the discretion of the project teams to further enhance participation and engagement within their pool.
Why Become a Liquidity Provider on Chainge?
- Earn Passive Income
Liquidity providers will earn a portion of trading fees, creating a reliable passive income stream without the need for active trading. - Support the KRC20 Ecosystem
By contributing liquidity, you help power seamless trades, reduce slippage and enhance the user experience across the platform. - Transparent and Fair Reward System
With a clear 1.5% fee-sharing model and Return ration dynamically calculated, participants can easily estimate their potential earnings.
Ready to Get Started?
Becoming a liquidity provider on Chainge is easy — just deposit your tokens on krc20.chainge.finance, sit back and starting October 29th, watch your rewards grow as they will be airdropped directly to your Kasware wallet.
You can find a written walkthrough on how to add liquidity here and a video tutorial here
With daily payouts and a 1.5% fee shared with LPs, it’s a win-win for those who want to support the decentralized KRC20 ecosystem while earning passive income.
