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Add liquidity
How to add additional collateral to existing pools
At any point in time prior to expiration, users can add collateral to an existing contingent pool and receive an equivalent amount of short and long position tokens in return. Existing position token holders will not be impacted in any way.
Example: Adding DAI 60'000 in collateral to an existing contingent pool that has already DAI 40'000 deposited into it with 40'000 long and short position tokens outstanding, will result in 60'000 new short and long position tokens being minted.
There are two main reasons why adding liquidity to an existing pool can be more attractive than creating a new one:
- Cheaper: Adding liquidity skips some of the steps involved in creating a pool (e.g., initial deployment of the position tokens and input validation checks) which results in lower gas costs for the user.
- Access to liquidity: Existing pools that already have an active and liquid market are more attractive for users than new pools with no or little liquidity.
The only compromise that a user has to make when adding liquidity is that they have to accept existing pool parameters and cannot modify them according to their needs.
Last modified 1yr ago