Why You Need Multiple LP's

If you have arrived at this page, you are probably wondering “why do I need additional liquidity pools?""

If your project revolves around a single liquidity pool (Ex. Token/BNB), than your volatility is 50/50 between your own supply and demand and the price of BNB. By adding additional liquidity pools such as BUSD, Pegged USDC, Pegged ETH, Pegged BTC, etc. . . You can reduce the backing assets control over your tokens price, giving your token more control over its own price!

Scenario One (You are solely paired to BNB):
  • 50% price volatility from your token.
  • 50% price volatility from the price of BNB.
Scenario Two (You have two pairs: BNB and pegged ETH):
  • 50% price volatility from your token
  • 25% price volatility from BNB.
  • 25% price volatility from pegged ETH.
Scenario Three (You have three pairs: BNB, pegged ETH, and BUSD):
  • 50% price volatility from your token.
  • 16.6% price volatility from BNB.
  • 16.6% price volatility from pegged ETH.
  • 16.6% price volatility from BUSD (which has 0% volatility)

With each additional liquidity pair you add, you reduce the backing assets impact/control over the price of your token, making your token more stable in terms of controlling its own price!

If you do decide to add additional liquidity pairs, be sure to checkout Arbitrage as a Service which allows you to generate profit for your project which would otherwise be lost to random arbitrage traders!