Pool Creation Explained
In two-sided liquidity pools, there are three key components to consider: the spot price (the initial price set when the pool is created), the fee (the percentage charged by the liquidity provider), and the delta (the percentage increase or fixed value added to the price with each sale depending on the curve type).
- Spot price = set the "base" price set when the LP is being created
- Delta = set bonding curve (Linear OR Exponential) that will increase the price after each sale within that pool
- Fee = the percentage perceived by the liquidity pool
When a customer purchases an NFT from a liquidity pool, the cost will be determined by the formula [Spot Price + fee + delta] set by the liquidity pool owner.
When a customer sells an NFT to a liquidity pool, you will receive value determined by the formula [spot price - fee] set by the liquidity pool owner.