Lending

Brief overview of providing liquidity to MYSO v1 pools

When liquidity providers (LPs) add liquidity to a pool to fund future incoming ZLLs, they earn a pro-rata share of the associated proceeds (pool shares). Once a loan has been repaid (or defaulted), LPs can thus claim their pro-rata share of the corresponding repayment (or left collateral).

After adding y in loan currency to a pool, LPs receive s(y) amount of pool shares:

Associated repayments or left collateral are then split between all LPs in a given pool based on their pool share.

When removing liquidity from a pool, LPs redeem s pool share and receive the following pro-rata amount y(s) of loan tokens:

After providing liquidity, note that LPs must wait a minimum lockup period of 120 seconds before they can remove liquidity. This is done to prevent flash liquidity provisioning.