Holdr Protocol Overview
  • Protocol Overview
  • Developer Docs
  • Product
    • Overview
    • The Vault
    • Pools
      • Weighted Pools
      • Composable Stable Pools
      • Liquidity Bootstrapping Pools (LBPs)
    • Smart Order Router
  • Concepts
    • Math
      • Weighted Math
      • Stable Math
    • Fees
  • Ecosystem
    • Governance
    • veHLDR and Gauges
      • veHLDR
        • How veHLDR Works
        • How To Use veHLDR
        • How veHLDR Boosting Works
          • Working Supply
          • Calculating My Boost
          • Minimum veHLDR for Max Boost
      • Gauges
        • How Gauges Work
  • Developers
    • Deployment Addresses
  • Getting Started
    • FAQs
      • Swapping
      • Liquidity
      • Liquidity Mining with the veHLDR and Gauge System
      • Fees
      • The Vault
      • Pools and LBPs
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On this page
  • How do I invest/provide liquidity?
  • What are the benefits of providing liquidity?
  • How are trade fees collected?
  • How do I get my trade fees?
  • How does a pool determine the price of tokens?
  • How does the self-balancing index fund work?
  1. Getting Started
  2. FAQs

Liquidity

PreviousSwappingNextLiquidity Mining with the veHLDR and Gauge System

Last updated 2 years ago

How do I invest/provide liquidity?

First time here? Check out this tutorial for a walk-through on how to add/withdraw liquidity.

In short, you'll need:

  • ETH to pay for gas fees

  • ERC20 tokens

  • An Ethereum address you can use with one of the following compatible wallets

    • MetaMask

    • Coinbase Wallet

    • A WalletConnect compatible wallet

    • Portis

    • Fortmatic

What are the benefits of providing liquidity?

Holdr Liquidity Providers (LPs) collect trading fees on each swap. In addition, some pools in V2 are eligible for Governance Distributions through the Liquidity Mining program.

To read more about fees, click .

How are trade fees collected?

When there is a trade in a pool, the pool collects a trade fee. The trade fee is denominated in the input token.

Example: Let's say there is a pool holding HLDR and DAI with a 3% trade fee. If Alice trades 100 DAI for HLDR, the pool will keep 3 DAI (3% of 100 DAI) and give her back an amount of HLDR worth 97 DAI.

How do I get my trade fees?

As the pool collects fees, your Holdr Pool Tokens automatically collect fees because they represent your proportional share of the pool.

Let's say Alice, Bob, Chuck, and Diana all provide liquidity in the same pool starting out worth $100. After some time, it has earned many trade fees and is now worth $200. The pool itself grows while their proportional shares stay the same.

Person
Proportional Share
Initial Value
Value After Trading

Alice

50.0%

$50

$100

Bob

25.0%

$25

$50

Chuck

12.5%

$12.50

$25

Diana

12.5%

$12.50

$25

How does a pool determine the price of tokens?

In general the AMM logic determines the prices that traders pay. For example, Weighted Pools, use a constant product formula and Stable Pools, use a StableSwap formula.

How does the self-balancing index fund work?

Holdr allows anyone to create a self-balancing index fund. Instead of paying a portfolio manager to continuously rebalance the fund, as investors do with an ETF, liquidity providers collect fees as traders rebalance the trading pools. This works because market actors are incentivized to rebalance the portfolio to take advantage of arbitrage opportunities.

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