# Liquidity Pools on Alton DEX

**Overview** Liquidity pools on Alton DEX are the backbone of the platform's decentralized exchange. These pools allow users to provide liquidity by depositing pairs of tokens, which are then used to facilitate trading on the platform. Liquidity providers (LPs) are rewarded with fees generated from trading activity within the pools, as well as other incentives like liquidity boosts for brands.

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**What Are Liquidity Pools?**&#x20;

Liquidity pools are collections of two or more tokens that are stored in smart contracts. These pools enable decentralized trading by providing the necessary liquidity for transactions, eliminating the need for centralized order books. Users can trade any pair of supported tokens directly, based on the liquidity available in the pool.
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In the case of Alton DEX, liquidity pools support both TON-based tokens and Alton tokens, allowing users to trade seamlessly between them.

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#### **Liquidity Pools Rewards**

* **Trading Fees:** As mentioned, LPs earn a portion of the fees generated by trades that use the pool. These rewards are automatically distributed to LPs based on their contribution to the pool.
* **Liquidity Boosts:** For brands and projects that participate in the Alton ecosystem, additional incentives such as liquidity boosts are available. These boosts are distributed to users who provide liquidity to the pools associated with specific brand tokens, encouraging engagement and increasing the overall liquidity for the brands.
* **Farming Opportunities:** LPs can also participate in yield farming to earn additional rewards. By staking their liquidity provider tokens (LP tokens) into a farming contract, users can earn rewards on top of the liquidity pool fees. These rewards can be in the form of additional tokens, including brand tokens, Alton tokens, or other incentives.

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#### **Benefits of Providing Liquidity on Alton DEX**

1. **Earn Passive Income:** Liquidity providers earn a share of the trading fees whenever their liquidity is used in a trade. As the volume of trades increases, so does the potential for earning.
2. **Support DeFi Projects:** By contributing liquidity to the pools, users help support decentralized finance (DeFi) and contribute to the success of various projects in the ecosystem, including brands using the Alton DEX platform.
3. **Access to Unique Tokens:** Alton DEX allows LPs to interact with a wide variety of tokens, including brand tokens and new DeFi projects that are listed on the platform. This opens up new investment opportunities for liquidity providers.
4. **Low Gas Fees with Alton Token:** Alton DEX users can enjoy gasless transactions by paying transaction fees using Alton tokens. This significantly lowers the cost of providing liquidity and trading on the platform.
5. **Increased Liquidity for Brands:** Brands participating in the ecosystem can offer liquidity rewards, which help boost the liquidity available in the pools associated with their token. This provides brands with a way to incentivize users and attract liquidity to their projects.

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#### **How to Add Liquidity on Alton DEX**

1. **Connect Your Wallet:** Begin by connecting your wallet (e.g., MetaMask, TonHub, etc.) to the Alton DEX platform.
2. **Select the Liquidity Pool:** Choose a token pair from the available pools. For example, you may choose the ALTON/TON pair or other supported tokens.
3. **Deposit Tokens:** Deposit equal value of both tokens into the pool. Ensure that the ratio between the two tokens is balanced for a smooth transaction.
4. **Confirm Transaction:** Review your deposit, and confirm the transaction. The liquidity pool will be updated, and you'll receive LP tokens as proof of your contribution.
5. **Earn Rewards:** As trading occurs on the platform, you will automatically start earning your share of the transaction fees. You can also participate in liquidity farming to boost your rewards.

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#### **Types of Liquidity Pools**

* **Standard Pools:** These pools are the core trading pairs on Alton DEX, where users can provide liquidity for tokens such as ALTON, TON, and other native or supported tokens.
* **Brand Pools:** Liquidity pools dedicated to specific brand tokens, where LPs can earn liquidity boosts by contributing to pools linked to brands. These pools offer additional incentives for brands and participants involved in the ecosystem.
* **Future Pools:** As Alton DEX grows, new pools will be introduced to support more token pairs and DeFi projects, offering further opportunities for LPs to engage and earn.

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#### **Liquidity Pool Management**

* **Withdraw Liquidity:** LPs can withdraw their liquidity at any time. When you withdraw, you will receive the equivalent amount of the tokens you initially deposited, plus any fees or rewards earned from the pool.
* **Monitor Pool Performance:** Users can track their rewards and the performance of liquidity pools through the Alton DEX dashboard. This feature provides insights into the liquidity pool’s activity, including trading volumes and rewards earned.

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#### **How Liquidity Pools Help the Ecosystem**

* **Increased Market Liquidity:** By providing liquidity, users ensure that there is enough supply of tokens for trades to occur without large price slippage. This ensures a smooth, efficient trading experience for everyone on the platform.
* **Brand Engagement:** Liquidity pools help brands incentivize users to engage with their tokens. The integration of brand rewards and liquidity boosts helps brands build stronger communities and increase the adoption of their tokens within the Alton DEX ecosystem.
* **Supporting DeFi Adoption:** Alton DEX encourages the use of decentralized finance (DeFi) by offering incentives to liquidity providers, supporting the overall growth of the DeFi space, and making it easier for users to access various DeFi products.

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In summary, liquidity pools on Alton DEX provide an essential function for the platform’s decentralized exchange. By allowing users to provide liquidity in exchange for rewards, the pools support both basic token trading and brand-specific missions, creating a thriving and engaging ecosystem for all users.
