Earning with Bullish Liquidity Pools

Important: Automated market making is available within the upper and lower price boundaries of our range-bound liquidity pools and for our standard liquidity pools. Returns may vary with our range-bound versus standard liquidity pools. Learn more by reviewing important information about our range-bound and standard liquidity pools at https://bullish.com/legal/range-bound-liquidity-pools. 

Note: BTC/USD is a range-bound liquidity pool with an amplification factor of 3x wherein the lower price boundary is at -56% and the upper boundary at +125% from the price at the time of the pool being initialized.

Understanding Bullish Liquidity Pools

Bullish Liquidity Pools (BLPs) are an advanced feature of Bullish that allows eligible customers to contribute to the platform’s liquidity while earning a share of the fees generated from trading fees (maker and taker fees) and margin interest. Most currency pairs listed on Bullish are linked to a BLP, optimized to generate liquidity and liquidity fees. Liquidity fees are held in the BLPs and are automatically redeployed for use until withdrawn.

All assets contributed to the BLPs are included in our Hybrid Order Book, which combines traditional bids and offers from third parties as well as from the Automated Market Maker (AMM).

Learn more about how to add liquidity and remove liquidity from Bullish Liquidity Pools.

Benefits of acting as a Liquidity Provider

When you contribute assets to a BLP, you earn a share of accrued trading fees (maker and taker fees) and margin interest for the relevant trading pair.

Liquidity fee calculation

BLP liquidity fees are calculated on the basis of the assets added into BLPs. The return is generated by trading fees (maker and taker fees) and margin interest, and are divided among BLP providers according to their BLP stake.

The fee is calculated primarily on three factors: ​​

  • The amount you are contributing relative to the overall size of the specific asset pair in the BLP,
  • How long you hold your assets in the BLP, and
  • The demand for liquidity services while your assets are in the BLP.
Note: Bullish keeps a portion of the fees and interest generated by the assets in the BLPs.

Watch the video below to learn more about BLPs.

 

The table below summarizes the availability of BLPs and margin services.

Pairs Standard liquidity pool Range-bound liquidity pool Margin services
BTC/USD   🌑  
ETH/USD 🌑   🌑
EOS/USD 🌑   🌑
ETH/BTC 🌑   🌑
LINK/BTC 🌑   🌑
LINK/USD 🌑   🌑
LTC/BTC 🌑   🌑
LTC/USD 🌑   🌑
USDC/USD   🌑  

 

Risk Warning: Margin User Default. Liquidity Providers’ Contributions to a Liquidity Pool will be used to grant loans to users of the Platform who wish to borrow either a Permitted Fiat Currency and/or Permitted Digital Currency in order to engage in Margin Trading. Liquidity Providers are exposed to the potential risk of losses arising from the default of Margin Trading users. While the safe margin lending feature of the Platform is intended to substantially mitigate the risk of loss arising from the default of Margin Trading users, Liquidity Providers may be exposed to unexpected external factors that could potentially impact the safe margin lending feature.

Risk Warning: Impermanent loss refers to the potential loss of value of the liquidity pool investment relative to holding the same assets outside the pool. The source of impermanent loss is the change in the price of one of the two assets held in the liquidity pool during the period of contribution. Liquidity providers may face impermanent losses because of volatility in a trading pair. The price of your deposited assets may fluctuate, and the change in asset prices may result in a loss by the time that you withdraw the assets. An unrealized loss may also happen in the lockup period of seven days for the withdrawal. Bullish is not responsible for your losses.

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