> For the complete documentation index, see [llms.txt](https://docs.jaawle.xyz/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.jaawle.xyz/product/provide-liquidity.md).

# Provide liquidity

Every market has one pool. The pool is the counterparty to that market's perp, and its LP token is a claim on its net asset value.

## What a pool holds

* **Stock and ETF pools** hold USDC and the market's tokenized shares. The keeper keeps about 60 % of the pool's value in shares by buying and selling with the issuer. The shares back traders' longs: a long can only be opened against inventory the pool actually holds.
* **Crypto pools** hold USDC only. Longs and shorts alike are backed by cash.

## Depositing

Deposit USDC into any pool, or shares into a stock pool. A deposit is a request: the keeper executes it at the pool's NAV at execution time, usually within a minute, and mints the pool's LP token. A withdrawal is the mirror, paid in USDC or in shares. Large USDC withdrawals from a stock pool may queue while the keeper sells shares.

Requests that are not executed within their time-to-live can be cancelled and the escrow reclaimed.

## The mint / burn fee

Each request pays a fee between 0 and 80 bps that depends on whether it moves the pool toward or away from its target weight. A deposit of shares into a pool that is short of shares is cheap; one that pushes it further from target is dear. The fee stays in the pool.

## What the LP token earns

| Source             | Direction                                                            |
| ------------------ | -------------------------------------------------------------------- |
| Taker fees         | in, on every open and close                                          |
| Borrow and funding | in, every second a position is open                                  |
| Traders' losses    | in                                                                   |
| Traders' gains     | out                                                                  |
| Dividends          | in, on the ex-date, net of the pass-through to open longs and shorts |
| Mint / burn fees   | in                                                                   |

Ten percent of taker fees and of borrow and funding go to the insurance vault, and ten percent to the protocol treasury. The rest is the pool's.

The pool's worst case is a sharp move against a crowded side, for instance a stock falling while traders are net short. The insurance vault covers bad debt so the pool is made whole up to the vault's caps. See [Liquidation and insurance](/risk/liquidation-and-insurance.md).

## The index

The index vault holds every child pool's LP token at target weights and mints its own token. One deposit spreads across every market: USDC goes to the most under-weight pool, redemptions come from the most over-weight one. It is the simplest way to be long the whole platform's yield.

## Where to look

The Pool page shows, per pool: NAV, share price, inventory against target, utilisation, the annualised return since the pool started, the yield sources, and your own position. The index page shows the weights and the blended return.


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