Liquidity provision is one of the best investment opportunities in the crypto space. Liquidity provision is also called yield farming. If you wish to have a balanced investment portfolio, you should include liquidity provision, mining and staking, among others.
Currently, there is a new channel of investment- investing in NFTS. Doki Doki is well-known for enabling artists to create their own NFTs, which they own and control.
Liquidity provision occurs when an individual has contributed financial resources to a pair of tokens such as AZUKI/ETH. In this case, the person puts equal amount of funds in each of them. For instance, an individual can contribute $1000 worth of ETH and $1000 worth of AZUKI to the ETH/\/AZUKI pair.
The individual contributes these to a pool liquidity. This increases the ease of converting the pair to cash. Usually, people put the $ sign to show a liquidity pool such as $AZUKI-$ETH. The person who provides the liquidity is called a liquidity provider.
What does a liquidity provider get in return?
The first thing to understand is that each liquidity pool has its own tokens commonly referred to as LP tokens. This means LP tokens are minted. Therefore, the liquidity provider gets reward in form of the LP tokens. The more liquidity you provide the more LP tokens you get.
Therefore, if an individual aims to benefit the most from liquidity provision, he/she should inject a lot of funds in it and at the earliest stage possible. The LPs are managed by Automated Market Makers (AMM) such as Uniswap.
Through the buying and selling of the LP tokens, revenue is generated in form of transaction fee. It is this revenue which is shared among all the LP token holders.
Although liquidity provision may carry risks, the high yield in terms of APY attracts investors.
Why saying all this?
This is not to scare anyone but to motivate all to participate in liquidity provision of Doki Doki tokens. You can provide liquidity to AZUKI pools, found in several platforms. The good news is that the returns for liquidity provision for Doki Doki tokens are very high.
So, when we are talking about Doki Doki, we do not only focus on creation and trading NFTs, but also investing in the Azuki token and the DOKI. The opportunities are available.
Community
Join the following telegram group and chat to learn the specifics of providing liquidity and other investment opportunities which Doki Doki offers.
Telegram chat: https://t.me/ddnfg
Telegram channel: https://t.me/ddnfa
