Liquidity Provision

Liquidity providers (LPs) deposit an equal value of a token and AVAX into a SnowDex trading pair. This liquidity enables other users to swap between the token and AVAX. In return, LPs earn a share of the fees generated by every swap.

Liquidity provision is only available for tokens that have graduated to SnowDex. Tokens still on a bonding curve manage their own liquidity automatically. See How It Works for details on graduation.

To add liquidity, provide both the token and AVAX in the correct ratio. The interface calculates the matching amount automatically based on the current pool price.

In return, you receive LP tokens that represent your share of the pool. These LP tokens can be used later to withdraw your proportional share of both assets.

A slippage tolerance setting protects you from large price movements between when you submit the transaction and when it executes.

To remove liquidity, burn your LP tokens. You'll receive a proportional share of both the token and AVAX from the pool based on the current pool composition.

Like adding liquidity, slippage protection ensures you receive at least the minimum expected amounts. Your pool share percentage is displayed so you can see exactly what proportion of the pool you're withdrawing.

Every swap on SnowDex includes a 0.20% LP fee. This fee stays in the pool's reserves rather than being extracted, which means your LP tokens gradually become redeemable for more of both assets over time.

Your earnings are proportional to your share of the pool. The more trading volume the pair sees, the more fees accumulate for LPs. See the Fees page for the full fee breakdown.

The interface displays your pool share as a percentage, showing how much of the total liquidity pool you own. This percentage changes as other users add or remove liquidity.

A larger pool share means you earn a larger proportion of the trading fees, but it also means you have more exposure to the token's price movements.