Liquidity Pools

Provide liquidity to earn trading fees and participate in the growth of the DropFi ecosystem.

What Are Liquidity Pools?

Liquidity pools are smart contracts that hold pairs of tokens, enabling instant trading without traditional order books. By providing liquidity, you earn a share of trading fees generated by the pool.

Earn Trading Fees

Receive a portion of all swap fees in the pool

Passive Income

Your assets work for you 24/7

Diversification

Hold multiple tokens in a single position

Liquidity Mining

Earn additional rewards through staking

How to Add Liquidity

1

Select a Pool

Choose a token pair you want to provide liquidity for.

Look for pools with high trading volume and good fee rates. Popular pairs like XRP/USDT typically offer the best returns.

2

Prepare Your Tokens

Ensure you have both tokens in your wallet.

You'll need equal value of both tokens. For example, if you want to add $1000 to XRP/USDT, you need $500 worth of XRP and $500 worth of USDT.

3

Add Liquidity

Enter the amount and confirm the transaction.

The interface will show you the expected LP tokens you'll receive and any fees. Review the details carefully before confirming.

4

Receive LP Tokens

Get LP tokens representing your share of the pool.

LP tokens are proof of your liquidity position. Keep them safe - you'll need them to remove liquidity later.

5

Start Earning

Begin earning trading fees immediately.

Your earnings will accumulate in real-time. You can track your performance in the liquidity dashboard.

Understanding the Risks

While providing liquidity can be profitable, it's important to understand the risks involved.

Impermanent Loss

When token prices change, you may receive fewer tokens than you deposited

Smart Contract Risk

Vulnerabilities in pool contracts could lead to loss of funds

Market Volatility

High volatility can increase impermanent loss

💡 Pro Tip
Consider providing liquidity to stable pairs (like USDT/USDC) to minimize impermanent loss, or use our impermanent loss protection features.

Removing Liquidity

You can remove your liquidity at any time by burning your LP tokens.
1

Select Your Position

Choose the liquidity pool you want to withdraw from.

You'll see all your active liquidity positions in the dashboard.

2

Enter Amount

Specify how much liquidity to remove.

You can remove all or part of your position. The interface shows how many tokens you'll receive.

3

Confirm Withdrawal

Review the transaction and confirm.

Check the token amounts and any fees before proceeding.

Advanced Strategies

Concentrated Liquidity

Focus liquidity in specific price ranges for higher efficiency

Auto-Compounding

Automatically reinvest earnings for compound growth

Yield Farming

Stake LP tokens to earn additional rewards

Portfolio Management

Track and optimize your liquidity positions

Liquidity Calculator

Calculate Your Potential Earnings
Use our calculator to estimate your potential earnings from providing liquidity. Enter your investment amount and the pool's trading volume to see projected returns.

Ready to Start Earning?

Ready to Start Earning?

Join thousands of liquidity providers earning passive income on DropFi.

On This Page

Select a documentation page to see its table of contents