What are LP tokens?

LPs, short for liquidity provider tokens, represent unique tokens issued upon depositing liquidity into a pool. They serve as evidence that you hold a stake in the pool and are entitled to a portion of the fees it generates.

QuantoSwap LPs are standard ERC-20 tokens bearing names such as ETH-USDT, each associated with its respective pool's LP contract. While LPs are typically non-tradable, theoretically, one could create a pool for trading ETH-USDT LP and ETH; however, this practice is uncommon.

The quantity of LPs corresponds to an individual stake in the pool relative to its total size. For instance, if you contribute $100 to a pool with $900 in liquidity, you might receive 1 LP. Conversely, adding $100 to a pool with $9,900 liquidity may yield only 0.1 LP. Although the relationship between a stake and LPs is more intricate, the value of 1 LP token can always be calculated using this formula:

Value of 1 LP = (total pool size)/(number of LPs in circulation).

The circulating supply of LPs can be determined by inputting the LP contract address into any Ethereum explorer.

Note: Burning LPs is the sole method for redeeming liquidity from a pool. Hence, if you no longer possess the LPs in your wallet, you cannot retrieve your funds. Avoid sending LP tokens to any other address, and always ensure that you connect to QuantoSwap using the same MetaMask account holding the LPs.

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