KLP
The platform's liquidity provider token is called KLP.
Last updated
The platform's liquidity provider token is called KLP.
Last updated
KLP is an index of the assets that are traded in swaps and leveraged transactions on the platform. Any index asset may be added by users to the liquidity pool (LP), and each time an index asset is removed, KLP is burned.
KLP holders receive KAVA and esKPE tokens as rewards.
The liquidity needed for leveraged trading is provided by the KLP token. As a result, KLP owners are the sources of liquidity and benefit when leveraged traders place losing transactions. Instead, they lose money when leveraged traders earn money off of their deals. Past PnL data and other stats can be viewed on https://
KLP can be minted and redeemed by going on the “Buy” page from the header and clicking on the “+ LIQ.”, “- LIQ” buttons in the KLP box.
This will take you to the following screen where you will see a recap of all KLP characteristics:
Price.
Wallet holdings.
APR.
Total supply.
.
You have the option to mint (+ LIQ button) or redeem (- LIQ button) KLP in box 1. Use button 2 or any other button in zone 3 to select any index asset to spend or redeem.
Enter an amount to view the fees required in zone 4 after selecting an asset.
Based on the overall value of the assets in the index, including the profits and losses from open positions, and the KLP supply, the price for minting and redemption is determined.
You can reduce your fees by being able to provide/redeem the assets that are most/least desired by the protocol.
Please be aware that once KLP are minted, incentives begin to accrue right away. Additionally, there is a 15-minute waiting period before KLP can be redeemed.
Depending on whether the action is in line with the protocol's requirements at the time or not, different costs apply to minting or redeeming KLP. Actions that further enhance the index's ETH holdings will incur a high cost, whilst those that decrease its ETH holdings will incur a low fee, for instance, if the index has a high percentage of ETH and a low percentage of USDC.
The token weights can be seen on the Dashboard.
Based on the open positions of traders, token weights are modified to aid KLP holders in hedging their positions. For instance, if many traders are short ETH, ETH would have a higher token weight; likewise, if many traders are long ETH, stablecoins would receive a greater token weight.
Even if many traders have long positions on the platform, the price of KLP will rise if token prices are rising. The portion set aside for long positions can be considered steady in terms of its USD worth because traders will be paid from its gains in an increase in price, and its losses in a decline in price will maintain its USD value.
