KnoxMarket - Help
Adding Liquidity & Sponsorship

What is liquidity pool?

Liquidity pool functions to improve the liquidity of each knowledge market topic and minimize slippage (the difference in expected winner vs loser % when a large trade is placed). A big liquidity pool will allow users to submit large bids while keeping the expected winner vs loser % close to 50%:50%. A detailed simulator is available here.

How to add liquidity?

Users can provide liquidity by clicking on "Add Liquidity". LPs earn 1.5% fees from the bidding pool to cover their impermanent loss.

What is impermanent loss?

Impermanent loss refers to a temporary loss caused to a LP due to imbalance in winning and losing bids.

What is LP fee?

Every bid incurs a fee paid out directly to LPs to cover their impermanent loss because facilitating large bids in a market requires liquidity. More liquidity in a market reduces slippage for users when they place a large bid. Without liquidity, there would be significant slippage & the expected winner vs loser % will be far from 50%:50%.

What is sponsor pool?

If a topic piques your interest and you want to see high-quality results coming out from the topic, you can sponsor the topic by funding the bidders & LPs directly.
Last modified 2mo ago