Constant Product Liquidity

Choice's liquidity pools allow anyone to provide liquidity by adding their assets to a pool. You will have allow Choice to use your CW20 token(s) while adding to liquidity pools that contain them.

How to add liquidity to a pool:

1. Select ‘Liquidity’ on the navigation menu.

2. After connecting a wallet, either input a token mint/pool address/ticker in the search bar or browse the pool list, then click 'Deposit' on the desired pool.

3. Select the tokens you wish to add to the liquidity pool. You must add liquidity to the pool in the form of two tokens at a 1:1 ratio according to USD value. Enter the amount of the first coin you wish to add, the second coin will adjust to match a 1:1 ratio. Then click 'Supply'. You will then need to approve the transaction in your wallet.

4. You should see a confirmation for the transaction. You should now be able to view your LP tokens in your wallet balance.

You have now successfully added to Choice's liquidity pool.

How to manage your liquidity

If you wish to reclaim your tokens or increase your position, navigate to the 'Portfolio' page then click 'Asset by Pool' under your assets. You can now easily select the desired action and confirm the transactions.

Liquidity pool explanation:

When you add to a pool you will receive Liquidity Provider tokens (LP tokens). For example, if a user deposited $INJ and $AUSD into a pool, you would receive INJ-AUSD cLP tokens.

These tokens represent a proportional share of the pooled assets, allowing a user to reclaim their funds at any point.

Every time a user swaps between $INJ and $AUSD, a 0.3% fee is taken on the trade. 0.2% of that trade goes back to the LP pool, 0.05% goes to the burn auction, and 0.05% goes to the fee wallet.

• Previously, if there were 100 cLP tokens representing 100 AUSD and 100 INJ, each token would be worth 1 AUSD & 1 INJ.

• If one user trades 10 AUSD for 10 INJ, and another traded 10 INJ for 10 AUSD, then there would now be 100.02 AUSD and 100.02 INJ.

• This means each LP token would be worth 1.0002 AUSD and 1.0002 INJ now when it is now withdrawn.

If you are unfamiliar with the concept of impermanent loss, reviewing this article for a basic understanding is highly recommended.