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.