The Pool Token is a governance token, aimed at feeding a DeFi ecosystem o (POOL) is one of Dex's tokens from Pool Party Finance. The Pool Token is a token that will serve as fuel for payments within the Pool Party Finance gaming platform and also for the purchase of Nfts. How to Read and Analyze a White Paper? What Are Crypto Debit Cards?
What are liquidity pool (LP) tokens?
Liquidity pool tokens (sometimes known as liquidity provider tokens) are given to users who provide liquidity in liquidity pools. These tokens act as a receipt, allowing you to claim your original stake and interest earned.
How do LP tokens work?
Perhaps the simplest use case for LP tokens is to transfer ownership of their associated liquidity. Some LP tokens are tied to specific wallet addresses, but most allow for the free transfer of the tokens. For example, you could send BNB-wBNB LP tokens to someone who could then remove the BNB and wBNB from the liquidity pool.
What is the risk of a token collapse?
Lastly, there’s the risk of token collapse. This can occur when one (or both) tokens in a decentralized liquidity pool lose the majority of its value, which can lead to dramatic losses for the liquidity provider — owed to the constant product formula employed by most automated market makers.
