Liquidity Pool FAQ's

How Does Helix Deal With Impermanent Loss?

As with all xy = k based amms, impermanent loss (IL) is a natural part of the way that the model functions and therefore is something which yield farmers need to factor into decision making.

IL occurs when the profit or loss of holding one asset in a trading pool diverges from the profit or loss of holding the other asset, however this loss is mostly not representative of a total loss compared to the initial dollar value of staked liquidity, but a loss compared to the potential profit that could have been gained by just buying and holding that liquidity.

Alternative options for generating yield without the potential risk of IL is using the single asset staking pools, vaults, or buying and staking Geobot NFTs.

What Are The Benefits Of Providing Liquidity?

Liquidity providers are the backbone of any decentralized exchange and are rewarded for supplying funds and helping the protocol. All swaps on Helix incur a small fee of 0.1%, which is allocated in its entirety to the liquidity providers from that trading pool.

More details can be found in the Helix tokenomics.

What Are LP Tokens

LP, or liquidity provider tokens, are given to users of the Helix AMM, after they supply the exchange with liquidity, and represent their share in a particular liquidity pool. LP tokens can be deposited into the farms to earn further yield, but should not be mishandled, as they are required to redeem the deposited assets.

Can I Remove Liquidity At Any Time?

There is no unstaking period on LP positions. To redeem your deposit, navigate to the liquidity tab, select the pool, and choose the amount.

What Is Single-Click Liquidity Migration

The single-click liquidity migration on Helix is a useful tool that will allow users to move LP from other decentralized exchanges to the platform, making the process easier, faster, and more efficient.