Liquidity Providing
Liquidity is added to the pool by liquidity providers (LPs). Each trade that passes through Flash protocol generally incurs a variety of dynamic fees and LPs will earn their pro-rata share of these fees. The fees involved in this platform include open/close position fees, margin fees, add/remove liquidity fees, and swap fees. Additionally, when processing liquidations any collateral that is left over once the position is closed will be given to LPs as fees. Thus, LPs will have the opportunity to generate yield on their underlying assets which otherwise would be sitting dormant.
When a user provides liquidity to the main pool they will be in a pool consisting of 4 tokens: BTC, ETH, SOL, and USDC. Each of the token has a target weight, min ratio, and max ratio. The token representing the main Flash Liquidity Pool is FLP.1. There is also FLP.3 which represents our Solana Beta pool and functions similar to Pool 1.
FLP.1 TOKEN BALANCES
| TOKEN | Target ratio | Min ratio | Max ratio |
|---|---|---|---|
BTC | 20% | 10% | 30% |
ETH | 10% | 6% | 20% |
SOL | 25% | 10% | 30% |
USDC | 45% | 45% | 65% |
FLP.3 TOKEN BALANCES
| TOKEN | Target ratio | Min ratio | Max ratio |
|---|---|---|---|
JTO | 24% | 20% | 40% |
PYTH | 18% | 10% | 30% |
JUP | 18% | 10% | 30% |
W | 10% | 3% | 20% |
USDC | 40% | 30% | 50% |
Note: The revenue generated by the liquidity pools will be given out separately to LPs in USDC and the price of FLP token would only reflect the price of the underlying assets only, hence FLP acts as an index token that generates passive yield.
How APRs are displayed on Flash Trade's Earn page
There are two numbers displayed on Flash's earn page. The first one before hovering over is the annualized return experienced by LPs for the previous day. The number displayed when hovering over is the annualized return experienced by LPs for the previous week.
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