Orbitium swap is a tool that allows for decentralized trading of assets within the Orbitium ecosystem. The swap enables a decentralized on-chain exchange for the various assets involved in the Orbitium ecosystem. This is made possible through the use of smart contracts and automated market makers (AMMs).
Automated market makers (AMMs) help the cryptocurrency exchanges work 24x7, without the need for any middlemen. Using algorithms and liquidity pools, AMMs execute the trade automatically.
The liquidity pool is a smart contract with a fund of tokens (or coins). There are two major roles in a liquidity pool.
Traders are individuals who use the AMM-based exchange to buy, sell, or exchange cryptocurrencies. When a trader executes a trade, they are essentially swapping one cryptocurrency for another using the exchange rate determined by the liquidity pool. Each trade executed against the liquidity pool incurs a trading fee, which is typically a percentage of the transaction value. These fees are used to incentivize liquidity providers and cover the operational costs of the exchange.
Liquidity Providers (LPs) add tokens or coins to liquidity pools, which improves the pool's liquidity for the corresponding pair market while maintaining the pool price. In return for providing the tokens, LPs receive LP tokens that represent their share in the pool. In addition to receiving LP tokens, Liquidity Providers (LPs) also earn a share of the trading fees collected by the automated market maker (AMM). So, LPs not only increase liquidity for the market but also earn a portion of the trading fees generated.
Refer to **Orbitium Fees** for details.
Refer to LP rewards for details.