Which Liquidity Protocol Gives the Best Gains: PancakeSwap (CAKE), Uniswap (UNI) or Calyx Network (CLX)?

We've all heard about crypto staking as a way to generate passive income, but what about becoming a liquidity provider? If you only trade on centralised exchanges, you may not be familiar with the term because this type of passive income can only be earned on decentralised exchanges like PancakeSwap (CAKE), UniSwap (UNI), and the newest Calyx Network (CLX), which has just entered presale.

What Does It Take to Be a Liquidity Provider?

A liquidity provider is a user who deposits crypto assets into a liquidity pool in order to facilitate trading on the platform while also earning passive income.

Liquidity pools are used by decentralised exchanges that use automated market maker-based systems to allow trading of illiquid trading pairs with low slippage. Such exchanges allow trades to be executed using funds held for each asset in each trading pair, rather than using traditional order book-based trading systems.

While trading illiquid trading pairs on order book-based exchanges can result in significant slippage and inability to execute trades, liquidity providers have the advantage of always being able to execute trades if their liquidity pools are large enough. As a result, liquidity providers are referred to as trade facilitators, and they are compensated for the trades they facilitate through transaction fees.

The amount paid to liquidity providers is determined by the percentage of the liquidity pool they provide. When funding the pool, they are typically required to fund two different assets in order for traders to switch from one to the other by trading them in pairs.

PancakeSwap (CAKE): Providing Liquidity

When you add your token to a Liquidity Pool, you will receive Liquidity Provider (LP) tokens as well as a share of the fees. The number of LP tokens you receive represents your share of the PancakeSwap (CAKE) Liquidity Pool. You can also redeem your funds at any time by withdrawing your liquidity.

When people use your liquidity pool, you get paid for providing liquidity in the form of trading fees. When a trader uses PancakeSwap (CAKE), they pay a 0.25% fee, 0.17% of which goes to the swap pair's Liquidity Pool.

You can also earn yield on the CAKE Farms while still earning your 0.17% trading fee, making being a liquidity provider on PancakeSwap (CAKE) even more worthwhile.

Uniswap (UNI): Providing Liquidity

In Uniswap (UNI) V3, LPs can concentrate their capital within custom price ranges, providing more liquidity at desired prices.

While Uniswap (UNI) V2 required all users to provide liquidity across the entire price curve from 0 to infinity, Uniswap (UNI) V3 allows LPs to concentrate capital in the price range they believe will generate the highest return.

Swapping fees are calculated as a percentage of the total volume swapped. The fees accrued during each swap through Uniswap (UNI) are split among LP providers based on your contribution to the LP. These fees are automatically deposited into the LP, so as fees accumulate, your total personal LP contribution rises.

Calyx Network (CLX): Providing Liquidity

Calyx Network (CLX) is yet to be released, having only recently gone into presale. Calyx (CLX) is a fully decentralised, community-driven, and permissionless exchange platform, which has sparked interest within the crypto community. Based on its previous activity, analysts predict that the price of CLX will skyrocket before its launch.

Calyx (CLX) will allow LP creators to create a pool (on any blockchain network) or add liquidity to existing pools in the protocol. As a result, LPs would have a higher capital efficiency and users would pay less slippage.

Because Calyx (CLX) is permissionless, anyone can become a Liquidity Provider or create a pool by donating an equivalent amount of underlying tokens in exchange for LP tokens. This includes traders and token teams.

Liquidity Providers will be able to earn a percentage of the fees generated by trades executed by the pool's traders as a result of this. On Calyx Network, LPs will be able to earn fees based on the amount of liquidity they contribute to the pool (CLX).

Trading fees will also be automatically adjusted based on the on-chain market conditions for higher returns. As a result, if the market is volatile, the fees are increased automatically to the desired level for maximum returns. Fees will be reduced if the market is less volatile, in order to encourage more trading activity and total fees collection.

Calyx (CLX) will collect liquidity from various sources operating on various blockchain networks and bring it together under a single roof, resulting in lower switching costs and faster trades without leaving the wallet. As a result, atomic token swaps and a project's native tokens would be usable across a wide range of ecosystems, platforms, and applications.

For more information, visit:

Website: https://calyx.network/

Telegram: https://t.me/CALYX_NETWORK_OFFICIAL

Twitter: https://twitter.com/CalyxNetwork

ENTER THE PRESALE NOW: https://presale.calyx.network/