# Decubate DCB liquidity staking

The provision of healthy liquidity is essential for every token. Projects can incentivize their community to provide liquidity and enable them to earn transaction fees made on decentralized exchanges.

# What is liquidity staking?

Liquidity staking enables users to easily create Liquidity pool (LP) tokens and lock them in a staking smart contract for extra rewards.

# What's a liquidity pool and LP token?

A liquidity pool is a smart contract that holds two tokens as trading pairs which combine into a liquidity pool token (LP). Liquidity pool tokens are utilized within decentralized exchanges as liquidity, which makes trading tokens possible. Anyone can provide the two trading pair tokens to any liquidity pool in exchange for LP tokens holding a percentage of that specific pool.

# How does liquidity staking work, and what can you gain?

LP tokens earn holders a percentage of the trading fees within that specific pool. To further stimulate the growth of liquidity pools, a project can incentivize LP holders to stake them within a pool for rewards, discounts, special offers, or access.

# Benefits to Decubate liquidity staking:

  • Earn extra high APY in DCB on locking liquidity.
  • Receive a portion of trading fees happening on our primary DEX.
  • Increase your tier on Decubate platform.
  • Boost your rewards by holding Decubate NFTs!

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# Does providing liquidity increase my Decubate tier?

Yes, providing liquidity for all Decubate pools increases your tier. The DCB tokens added to liquidity staking pools even count as double for your tier!

# What makes Decubate’s liquidity staking unique?

Decubate liquidity staking is extremely easy to use because the smart contract creates LP tokens and stakes them within the same contract. This saves our community the hassle of going to a decentralized exchange and following this process manually.

# What is a common risk of liquidity staking?

Impermanent loss can occur when the value of a crypto token changes with respect to another crypto token due to supply and demand. When the ratio of the two assets held is unequal, likely due to a dramatic increase in the price of one of the tokens, it can lead to an impermanent loss of value, and the liquidity provider ultimately losses out on one of their asset’s profits. A loss can become permanent if the liquidity provider prematurely removes its funds from the pool before the price has the opportunity to recover.