How JSOHO Pools Work

Understanding the mechanics of JSOHO Pools is crucial for users looking to participate and maximize their returns.

1. Providing Liquidity

To become a liquidity provider, users deposit equal values of two tokens into a pool. For example, if a user wants to provide liquidity to the JSH/USDC pool, they must deposit equal amounts of JSH and USDC tokens. This process involves locking the tokens in a smart contract, which then facilitates trading and other financial activities.

1. Earning Rewards

Liquidity providers earn a share of the trading fees generated by their pool. These fees are distributed proportionally based on the amount of liquidity each user has contributed to the pool. Additionally, JSOHO Network may offer incentives such as bonus tokens to further reward liquidity providers.

1. Impermanent Loss

One key concept for LPs to understand is impermanent loss, which occurs when the price ratio of the deposited tokens changes compared to when they were deposited. This section will explain impermanent loss in detail and how it affects potential returns. Strategies for mitigating impermanent loss will also be discussed.