An example of ELP’s in Action
User creates the liquidity pool for Token A/Token B, and sets Token A to be the PT of the liquidity pool. After a period of time, the ELP collects 30 Token A, and 50 Token B as fees (with a total value of 11ADA). Once the ‘Serve’ Operation is executed, the first set of rounds for CNT/CNT pairs will commence. This ELP contains more than 10ADA worth of value. As such, the first requirement of the round is passed and the Token A/Token B ELP will be served.
Step two of the round will now commence. We swap all Token B to Token A — as Token A has been selected as the PT in the pair.
Once swapped, step three of the round can take place. All the accrued Token A is sent to the ELP for the ADA/Token A pair.
Once this process has taken place for all CNT/CNT pairs, set one is complete. We now repeat this process for all ADA/CNT pairs - we begin set two.
The same rounds then repeat, but with ADA as the PT for all ADA/CNT linked pools. All the ADA that is accrued at the end of set two is then sent to the VYFI/ADA ELP.
Once all the rounds have been completed for every ADA/CNT pair, set three commences for all VYFI linked pairs. This will result in all the accrued ADA being converted to VYFI and being distributed to the BAR.
Last modified 6mo ago