Basic overview of providing liquidity for Polynomial Protocol
Users can provide liquidity to Polynomial protocol using the pool page. This liquidity is managed using the Polynomial Liquidity protocol.
For call options: The Pool is made up of Collateral and Polynomial call option tokens. The Pool comprises a Stable coin (USDC) and a Polynomial put option token for put options. Users can see the positions afterwards in the portfolio page. The value of the underlying pool token is calculated using:
All the pools are currently in a 1 percent fee Uniswap v3 pool. To offset the impermanent loss and to gain fees on the Pool.
When you provide liquidity the fee is split into two parts 0.2% for Polynomial Protocol and rest 0.8% to the liquidity providers. To understand these better, read below:
You can remove the liquidity from the pool position, which then converts to the underlying option and collateral from the liquidity pool. You can withdraw a position from the portfolio page.