Provide Liquidity

For individuals who lack the expertise, time, or desire to independently manage market-making activities and create market maker pools, providing liquidity to an existing pool is a more straightforward alternative. By doing so, you can participate in earning market-making rewards while sharing the associated risks with others in the pool.

How to Choose

When selecting a pool, there are three key indicators to consider: TVL, APR, and MDD.

1. TVL (Total Value Locked): This represents the total amount of capital within the pool and serves as a significant indicator of the pool’s popularity and the confidence other liquidity providers have in it.

2. APR (Annual Percentage Rate): This reflects the estimated annual return. We offer three different views for APR: weekly, monthly, and all-time, depending on whether you want the calculation based on short-term data (weekly/monthly) or the entire available data. For assessing short-term performance, the weekly option is recommended.

3. MDD (Maximum Drawdown): This is a common measure of risk in investment strategies. On Mount Exchange, MDD indicates the largest percentage drop in market making during a specific period. A higher MDD suggests greater risk. The formula for Maximum Drawdown (MDD) is:

This formula measures the largest decline in the value during a specified period, highlighting the risk associated with the investment strategy.

Providing Liquidity

Once you've selected a Market Maker (MM) pool with your preferred strategy and attributes, navigate to the pool details page. On the right side, you'll find the option panel for providing liquidity. If this is your first time providing liquidity on Mount Exchange, you'll need to approve the MOUNT allowance first. Enter the amount of MOUNT you'd like to deposit, and the current exchange rate will be displayed, along with the amount of pool LP tokens you'll receive in return. The final step is to submit the transaction through your wallet and approve it. Once the transaction is successfully executed, you should see your updated balance in the "My Share" section.

Removing Liquidity

To remove liquidity, navigate to the option panel and select the "Remove" tab. You’ll see your LP token balance and can specify the amount you wish to withdraw. After entering a valid amount, the system will calculate and display the applicable service fee, which will be detailed on the next page. Submit the transaction through your wallet and approve it. If the available liquidity is insufficient, you may need to try again later.