Welcome to the Polkamarkets V2 Documentation!
logo

Rewards for Liquidity Providers

Liquidity Providers are essential to well-functioning prediction markets. Given that there are risks involved, Liquidity Providers are rewarded for adding liquidity:
  • They can earn a fee up to 5% of every trade.
👉
For example, Alice has provided 60% of the liquidity to a given market, and therefore holds 60% of the market's liquidity pool shares. When Bob buys $100 USDC worth of shares in outcome A in that market, he pays a $2 USDC fee (2% of the trade value) to the Liquidity Providers. Alice will earn 60% of the $2 USDC fee paid by Bob, ie. $1.2 USDC.
The higher the number of trades in a market, the more fees will be earned by Liquidity Providers.
⚠ī¸
It is important to note that adding liquidity is not without risk. Make sure you understand the Strategies and Risks for Liquidity Providers before providing liquidity to a market.
SHARE