What is Binance Liquid Swap？
Binance Liquid Swap is based on the principle of "liquidity pool" to exchange crypto assets. The price of the crypto will be determined by the amount of cryptos in the liquidity pool.
How does Binance Liquid Swap determine the price of Crypto？
Binance Liquid Swap uses the following formula to determine the transaction fee and price between the two crypto assets. Traders swapping or adding funds into the liquidity pool will affect the price of cryptos. In the same way, traders adding and removing funds from the liquidity pool is involved in market making (AMM automatic market maker).
Why Binance Liquid Swap?
Through Binance Liquid Swap, traders can exchange cryptos quickly. In addition, they can earn interests by adding liquidity to the pool.
1. Swap Cryptos in seconds
In the process, smaller transactions won’t generate any spreads, and larger transactions will significantly reduce slippage through the swap. Traders can enjoy stable prices and competitive fees.
2. Add liquidity and earn shares and interests
Traders who add liquidity to the pool, by adding funds, will earn fees generated by the pool transactions, and enjoy interests on cryptos.
Note that you can remove your funds from the pool according to your current pool share. The removal can be proportional to the two cryptos of the pair selected, or you can pick one of the cryptos individually. If you choose one crypto, you will have to pay a transaction fee, which will be deducted from the amount you can get.