Liquidity Provider

Provide liquidity, earn fees, grow your assets

What is a Liquidity Provider?

A Liquidity Provider (LP) supplies tokens into a trading pool on the Esher DEX so that others can swap between assets instantly. In return, LPs earn a portion of the trading fees — and in some pools, additional reward incentives.

Anyone can become an LP on Esher by depositing equal values of two tokens into a supported pair (e.g., USDT/ESH, IDR/XYZ). Once deposited, you’ll receive LP tokens representing your share of the pool.

How You Earn

As a liquidity provider, you earn in two main ways:

  1. Trading Fees – Every time someone trades in your pool, a small fee (e.g., 0.3%) is distributed proportionally to LPs.
  2. Staking Rewards (Optional) – Some pools include extra rewards (paid in ESH or other tokens) to incentivize liquidity.

How to Become an LP

  1. Go to the Esher DEX interface
  2. Choose a supported trading pair (e.g., ESH / USDT)
  3. Deposit equal value of both tokens into the pool
  4. Receive LP tokens as proof of your share
  5. View your pool position, earnings, and withdraw anytime

Risks to Consider

While liquidity provision offers attractive yields, it also comes with risks. The most common is impermanent loss, which occurs when the value of your deposited tokens changes significantly compared to when you first added them. Additionally, low-volume pools may not generate meaningful fee returns, and rug pulls can happen if one side of the pair is an untrusted token. Always evaluate token credibility, pool demand, and your personal risk tolerance before committing funds.

Example Use Cases

  1. Stake ESH/USDT to earn trading fees + ESH reward
  2. Add liquidity to your own User-Issued Asset (UIA) to kickstart trading
  3. Submit your witness registration via the UI wallet or CLI
  4. Farm LP tokens in the future to boost yield