What is liquidity?

What is Liquidity and how do you add/remove liquidity from markets?

In order for users to be able to buy/sell outcome shares, markets are required to have liquidity.

The benefits of adding liquidity to markets are the following:

• A 2% fee is taken from every buy/sell transaction and redistributed to Liquidity Providers.

• The more liquidity that is provided, the lesser the price impact when buying or selling outcome tokens, thereby increasing the accuracy of the data / forecast.

You can find out more about how outcome prices are determined here

pageHow are market prices determined?

How do I add liquidity to a market?

Navigate to the market you wish to add liquidity to and click on Add Liquidity

The number of liquidity shares you receive depends on the price of the outcomes.

The more one-sided a market is, the fewer LP shares you will receive. Instead of receiving liquidity shares, you will get compensated in outcome tokens - of the most/least probable event when adding/removing liquidity, respectively.

Select the amount you wish to add to liquidity and confirm the transaction.

How do I remove liquidity from a market?

Navigate to the market you wish to remove liquidity from and click on "Add Liquidity" and then select "Remove" on the top.

Similar to when adding liquidity, the number of liquidity shares you receive depends on the price of the outcomes. You will also claim your share of the fees collected from the liquidity pool when removing liquidity.

Select the amount you wish to add/remove liquidity and confirm the transaction.