Liquidity Provider

There is a decentralized exchange built in the iGain protocol. Liquidity is required in the pool so that investors may trade the options. Therefore, liquidity providers can be regarded as the sellers of the options.

Add Liquidity

Anyone can become the liquidity provider on iGain. By depositing 1 DAI, 1 Long token and 1 Short token will be minted by the system. Then, these tokens could be provided in the liquidity pool.

Becoming liquidity providers may earn trading fees and external incentives as income. However, they might also suffer an impermanent loss of Long and Short tokens.

The below condition is always satisfied in the iGain protocol:

$$1\ DAI=1\ Long\ +1\ Short$$

1 DAI can always mint 1 Long token and 1 Short token; 1 Long token and 1 Short token can also redeem 1 DAI at all times.

pageAdvanced: Customized Proportion

Remove Liquidity

There are two ways for the liquidity providers to remove liquidity and redeem DAI back depending on different timings. Details are described in the below chapter:

pageRedemption