Liquidity Providing

Investors can engange as liquidity providers on ISSUAA. In return for providing ISSUAA asset tokens / ISS and USD stable coins into the market pool, liquidity providers will receive LP Tokens. Each market pool has a unique LP token associated with it and cannot be combined with LP tokens from other pools. The LP tokens act primarily as a unit of account, representing the liquidity provider's share in the pool. The amount of LP token held in relation to the total amount of LP tokens in one pool thus represent the share of ISSUAA assets/USD stable coins than can be claimed when removing liquidity.

LP Token Supply

Note that pools for short tokens and long tokens on the same underlying asset are separated from each other. Each underlying asset thus has two separate pools.


A user can provide liquidity by depositing tokens to both sides (ISSUAAassets and USD stable coins) of an ISSUAA market pool. This results in the creation of LP tokens for that pool, which they can use to retrieve ISSUAA assets/USD stable coins from the pool.

Creating a new pool

For a new pool with starting quantities of USD stablecoins and asset tokens / ISS
, the number of LP tokens is:

Adding to an existing pool

Given quantities of USD stable coins and asset tokens/ISS being deposited
, and currently in the pool prior to deposit
, and the current supply of LP tokens
, the amount of newly minted LP tokens is:
LPnew=min⁡(AinXLPtotal,BinYLPtotal)\text{LP}_{\text{new}} = \min\bigg(\frac{A_{\text{in}}}{X}\text{LP}_{\text{total}}, \frac{B_{\text{in}}}{Y}\text{LP}_{\text{total}}\bigg)
Although liquidity providers can deposit any amount for both tokens, they are incentivized to put in quantities where value is equal on both sides, taking into consideration the asset token's or ISS token market price. Doing otherwise would cause them to incur losses as it would create arbitrage opportunities against the pool, and the LP tokens they received would be insufficient to recover the liquidity they provided.

Remove Liquidity

It is very probable that the amounts of assets recovered by burning LP tokens will be different than the quantities deposited. This comes from a variety of reasons such as price movement of asset token / ISS, changes in your relative share of the liquidity pool, etc.
A user can burn their LP tokens to recover their deposited liquidity. The pool will send back amounts of USD stable coins and ISSUAA asset tokens (or ISS), depending on the amount of LP tokens they burn, determined by the formulas shown below.
Aout=LPburnLPtotalXA_{\text{out}} = \frac{\text{LP}_{\text{burn}}}{\text{LP}_{\text{total}}}X
Bout=LPburnLPtotalYB_{\text{out}} = \frac{\text{LP}_{\text{burn}}}{\text{LP}_{\text{total}}}Y

LP Commission Rewards

Holders of LP tokens receive a portion of rewards generated by the pool's trading fees, divvied out in proportion to total share of LP token pool. A portion of either ISSUAA asset tokens/ISS or USD stable coin (depending on the direction of the trade) gets added back into the pool as the LP Commission.
Because the trading fee rewards are returned to the pool, they can only be withdrawn by burning LP tokens and withdrawing liquidity.

ISS Rewards

A sufficient amount of liquidity in the market pools is crucial for investors to be able to buy and sell with a low impact on the price. The ISSUAA protocol thus incentivises users to provide liquidity to the individual market pools by rewarding ISS tokens to Liquidity Providers on a weekly basis. Details regarding the ISS incentive program can be found in the sections ISS and veISS Tokens.