Element Protocol Docs
GovernanceCommunityXForum
  • Element Protocol Documentation Portal
  • Getting Started
    • Buying Fixed Rate Assets
    • Earning Variable Rates
    • Providing Liquidity
    • FAQ
    • Glossary
  • Element Protocol
    • Concepts Overview
    • Principal Tokens
      • Use Cases
    • Yield Tokens
      • Use Cases
    • Market Forces
    • Providing Liquidity
    • Element Protocol Smart Contracts
      • Core Protocol Contracts
        • Wrapped Position
        • Tranche
        • Tranche Factory
        • Interest Token
        • User Proxy
      • Integration Contracts
        • Yearn Vault Asset Proxy
      • Custom Balancer Curve
        • Convergent Curve Pool
        • Convergent Curve Pool Factory
  • Developers
    • Public Release Changelog
    • Elf SDK
    • Deployment Guide
    • Security
      • Oracles
    • Github
  • Governance (Council)
    • Council Protocol Overview
      • Voting Vaults and Delegation
      • Governance Steering Council (GSC)
    • Council Protocol Interface
      • Overview
      • Proposals
        • Guide: Voting on a Proposal
      • Delegate
        • Guide: Delegating Voting Power
          • DAO (Social) Proposal Template
          • Protocol (Executable) Proposal Template
    • Element Governance Proposal Framework
      • Guidelines of the Element Governance Proposal Framework (EGPF)
      • Venues For Participating in Governance & Discussion
      • What Governance Controls Today
        • Current Protocol Parameters
        • Current Governance Parameters
      • Current Governance Roles
      • The Governance Process
        • Proposals & Proposal Types
        • The Proposal Process Overview
        • The Proposal Lifecycles
          • DAO (Social) Proposal Lifecycle Breakdown & Criteria
          • Protocol (Executable) Proposal Lifecycle Breakdown & Criteria
        • Off-chain Voting Information (Snapshot)
        • On-chain Voting Information
    • Council Protocol Smart Contracts
      • Core Voting
      • Voting Vaults
        • Locking Vault
        • Vesting Vault
        • Governance Steering Council (GSC) Vault
      • Timelock
      • Treasury
      • Spender
      • Optimistic Grants
      • Optimistic Rewards
      • Simple Proxy
    • Airdrop
      • Storage
      • Guide: Discord ZK Claim Flow
      • History
    • Glossary (Governance)
    • Audits
    • Deployed Contract Addresses
  • ELFIVERSE
    • Guide: Mint Your ELF NFT
  • Community
    • Discord
    • Blog
    • X
    • Telegram Announcements
    • Youtube (Community Calls and Video Guides)
Powered by GitBook
On this page
  • What is providing liquidity?
  • What is the incentive of providing liquidity?
  • How do I provide liquidity?‌
  • What is an AMM?
  • What is Slippage?

Was this helpful?

  1. Getting Started

Providing Liquidity

PreviousEarning Variable RatesNextFAQ

Last updated 1 year ago

Was this helpful?

What is providing liquidity?

Providing Liquidity is the process of adding liquidity into an AMM by providing both sides of a trading pair and becoming a Liquidity Provider (LP). Element enables users to be liquidity providers for Principal Tokens.

What is the incentive of providing liquidity?

The incentive of liquidity providers is that it allows users to earn trading fees on their supplied assets. For users who are buying discounted assets and staking, they will be earning a volatility dampened variable yield and AMM fees for providing liquidity.

For users who are minting Principal Tokens and then providing liquidity with their Principal Tokens, they will be earning variable interest yield (from holding the yield tokens) in addition to AMM fees for providing liquidity.

How do I provide liquidity?‌

What is an AMM?

What is Slippage?

Slippage is an occurrence when traders have to settle for a price difference than what they were initially quoted or had requested due to a price movement.

To provide liquidity on Element platform, visit this step-by-step walkthrough .

AMM stands for an automated market maker. AMMs allow users to supply liquidity towards a trading pair to earn passive income in the form of trading fees, or exchange between various paired assets. The AMM that Element uses is a decentralized AMM called and has been optimized to handle Element's principal tokens.

guide
Balancer