Liquidity Pools
What is NLP? (Simple Explanation)
NLP (Narwhal Liquidity Pool) is like owning shares in the casino. When you buy NLP tokens, you're pooling your money with other investors to provide the funds that traders bet against.
How It Works:
Traders win → Money comes out of the shared pool (your investment can decrease)
Traders lose → Money goes into the shared pool (your investment grows)
Trading fees → 60% of all platform fees go to NLP holders (steady income)
Your Returns Come From:
Trading fees - You earn 60% of every trade made on Narwhal
Net trader losses - When traders lose money overall, you profit
Price appreciation - As the pool grows, your NLP tokens become worth more
How NLP Pricing Works:
Your NLP tokens automatically adjust in value based on a simple formula:
NLP Price = (All USDC in pool + Trader profits/losses + Accumulated fees) ÷ Total NLP tokens
Example:
Pool has $1 million USDC
Traders lost $50,000 total (good for you!)
Platform earned $30,000 in fees
1 million NLP tokens exist
Your NLP price: ($1M + $50K + $30K) ÷ 1M = $1.08 per token
Simple Summary:
You're basically investing in the edge of a market maker. You earn steady income from trading fees, plus you profit when traders lose money overall. But remember - if traders get lucky and win big, your investment value can go down.
This version uses:
Simple analogies (casino ownership)
Clear cause-and-effect explanations
Concrete example with real numbers
Plain English instead of technical jargon
Bullet points for easy scanning
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