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Liquidity Pool Minting & Burning Fees
Becoming a Liquidity Provider...
When you buy $KLP, you are essentially minting new $KLP tokens, while selling $KLP results in burning, or reducing, the total supply of $KLP tokens. The amount of $KLP you want to buy or sell can be entered on the Buy/Sell $KLP page, and the transaction will be executed based on the current market price and liquidity available.
LPs are charged a fee for minting / burning $KLP tokens. The fees for minting and burning $KLP tokens are dynamic and depend on the supply and demand of the assets in the $KLP pool. The fee charged for minting or burning $KLP tokens varies depending on whether the action improves the balance of assets in the pool or reduces it. If the action improves the balance of assets, the fee will be lower, but if it reduces the balance of assets, the fee will be higher. This is done to incentivize users to maintain a balanced pool.
In a $KLP pool with a high percentage of $ETH and a low percentage of $BUSD, fees for actions that increase the amount of $ETH in the pool will be higher, while fees for actions that reduce the amount of $ETH in the pool will be lower.
The fees for minting and burning $KLP is calculated based on (total worth of assets in index including profits and losses of open positions) / (KLP supply).