Ever wondered how STON.fi actually works behind the scenes?
Most of us are used to Binance you put a buy or sell order and someone on the other side takes it. Simple.
On @STONfi DEX it’s different. There’s no order book. Instead, it uses something called liquidity pools.
Think of a liquidity pool like a big shared pot of two tokens. For example, one pot might hold TON and USDT. People who want to earn (we call them Liquidity Providers) put both tokens into the pot. In return they get LP tokens that show how much of the pot belongs to them.
When someone comes to swap TON for USDT, they’re not trading with another person. They’re trading directly with the pot. The smart contract just adjusts the amounts inside and gives them the other token.
Every time someone swaps, a small fee is taken (usually 0.3%). Most of that fee goes straight to the people who put money in the pot. The more you put in, the bigger your share of the fees.
That’s how people earn just by providing liquidity.
One thing to keep in mind though if the prices of the two tokens move a lot relative to each other, you can end up with something called impermanent loss. It’s not always bad, but it’s good to understand before you put in a large amount.
The cool part about doing this on TON is that network fees are extremely low, so providing liquidity and swapping feels smooth and cheap compared to a lot of other chains.
So next time you swap on STON.fi, just remember you’re trading against a pool that other people filled, and those people are earning a cut of every trade.
Pretty neat system once you see how it works.
#STONfi
Most of us are used to Binance you put a buy or sell order and someone on the other side takes it. Simple.
On @STONfi DEX it’s different. There’s no order book. Instead, it uses something called liquidity pools.
Think of a liquidity pool like a big shared pot of two tokens. For example, one pot might hold TON and USDT. People who want to earn (we call them Liquidity Providers) put both tokens into the pot. In return they get LP tokens that show how much of the pot belongs to them.
When someone comes to swap TON for USDT, they’re not trading with another person. They’re trading directly with the pot. The smart contract just adjusts the amounts inside and gives them the other token.
Every time someone swaps, a small fee is taken (usually 0.3%). Most of that fee goes straight to the people who put money in the pot. The more you put in, the bigger your share of the fees.
That’s how people earn just by providing liquidity.
One thing to keep in mind though if the prices of the two tokens move a lot relative to each other, you can end up with something called impermanent loss. It’s not always bad, but it’s good to understand before you put in a large amount.
The cool part about doing this on TON is that network fees are extremely low, so providing liquidity and swapping feels smooth and cheap compared to a lot of other chains.
So next time you swap on STON.fi, just remember you’re trading against a pool that other people filled, and those people are earning a cut of every trade.
Pretty neat system once you see how it works.
#STONfi
