Liquidity Pools

Transaction Fee will directly go to Liquidity Provider, 0.3% of each transaction. More complex transaction fee distribution mechanisms are welcomed - you can propose them at ACY DAO.

ACY's liquidity pool allows anyone to provide liquidity through the following link: acy.finance/#/liquidity. When they do, they will receive ALP tokens (ACY Liquidity Provider tokens). If users deposit $ACY and $ETH into the pool, they will receive ACY-ETH ALP tokens. These tokens represent a proportional share of collective assets, allowing users to withdraw their funds at any time.

Every time another user uses the pool to trade between $ACY and $ETH, a 0.3% fee is charged for the transaction. 0.25% of transactions will return to the LP pool. The value of ALP tokens represents the total liquidity share of each pool and is updated in each transaction to increase their value relative to the tokens used in the pool for transactions.

If there were 100 ALP tokens representing 100 ETH and 100 ACY before, then each token will be worth 1 ETH and 1 ACY (note that in this example, ETH and ACY are the same relative value). If one user exchanges 10 ETH for 10 ACY, and another user exchanges 10 ACY for 10 ETH, then there will now be 100.025 ETH and 100.025 ACY. This means that when LP tokens are withdrawn, each token is now worth 1.0025 ETH and 1.00025 ACY.

Instructions for using acy.finance/#/liquidity to add liquidity

1. Increasing liquidity is really simple. First, you must select the token you want to enter. Click "Select Token".

2. If you have never used ACY Finance before, this will trigger a pop-up window asking you to select a token list. Just click the token list.

3. After selecting the list, you will see the tokens represented in the list and their balance (if any). In this case, we only have two tokens, ACY and ETH.

4. After selecting the input token you want, you can click "Supply"! If this is your first interaction with ACY's smart contract, you will be prompted to "Approve" to allow our smart contract handle the token for you.

5. After completing the liquidity addition, you will receive ACY liquidity Provider (ALP) tokens in return. These represent your share in the liquidity pool and the income expenses you receive when you redeem liquidity.

Increase liquidity to the new pool

If the pool you wish to provide liquidity does not exist, of course you can create it! Just provide the tokens and you are ready to go. As the first liquidity provider, if one of the tokens does not yet exist on ACY, set the initial exchange ratio (price). Through arbitrage and more liquidity providers inject liquidity into the pool of funds, this situation tends to correct itself quickly.