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QLP is the platform's liquidity provider token.
QLP consists of an index of assets used for swaps and leverage trading. It can be minted using any index asset and burnt to redeem any index asset. The price for minting and redemption is calculated based on (total worth of assets in index including profits and losses of open positions) / (QLP supply).
For Fuse, holders of the QLP token earn Escrowed Qiji rewards and 70% of platform fees distributed in Fuse. Note that the fees distributed are based on the number after deducting referral rewards and the network costs of keepers, keeper costs are usually around 1% of the total fees.
Staked QLP token address (Fuse): [...]
Note that QLP is specific to the network you mint it on, it is not directly transferrable between networks and the price / rewards to the tokens will differ between networks.
As QLP holders provide liquidity for leverage trading, they will make a profit when leverage traders make a loss and vice versa.
- Bridge any of the QLP tokens to Fuse, a list of QLP tokens can be found on the Dashboard.
- Fees will be lower for tokens that the pool has less of, check the "Save on Fees" section to get the lowest fees
Fees for buying QLP will vary based on which assets the index has less or more of, the Buy QLP page will show which assets have the lowest fee.
Key in the amount of QLP you'd like to redeem at
The fees to mint QLP, burn QLP or to perform swaps will vary based on whether the action improves the balance of assets or reduces it. For example, if the index has a large percentage of ETH and a small percentage of USDC, actions which further increase the amount of ETH the index has will have a high fee while actions which reduces the amount of ETH the index has will have a low fee.
The token weights can be seen on the Dashboard.
Token weights are adjusted to help hedge QLP holders based on the open positions of traders. For example, if a lot of traders are long ETH, then ETH would have a higher token weight, if a lot of traders are short, then a higher token weight will be given to stablecoins.
If token prices are increasing, then the price of QLP will increase as well, even if a lot of traders have a long position on the platform. The portion reserved for long positions can be treated as stable in terms of its USD value since if prices increase the profits from that portion will be used to pay traders, and if prices decrease, the losses of traders will keep the USD value of the reserve portion the same.
If a lot of traders are short and larger weights are given to stablecoins, then QLP holders would have a synthetic exposure to the tokens being shorted, e.g. if ETH is being shorted then the price of QLP will decrease if the price of ETH decreases, if the price of ETH increases then the price of QLP will increase from the losses of the short positions.
Caution should be exercised when interacting with any smart contract or blockchain application. While risks are attempted to be mitigated through testing, audits and bug bounties, there is always a risk of vulnerabilities in smart contract code.For details of contract operation please read the Contracts section.
A non-exhaustive list of some risks:
- Smart contract risks
- Counterparty risks: The QLP pool is the counterparty to traders, if traders make a profit that comes from the value of the QLP pool
- Token risks: Bridged tokens may depend on the security of the bridge, pegged tokens have risks of depegging