Understanding dAMM Pools
Tokens are aggregated within liquidity pools and subsequently lent to institutional borrowers. Once tokens are deposited to the dAMM platform, liquidity providers are given liquidity tokens proportional to their deposit.
These liquidity tokens can be burned at any time for the underlying asset. As interest denominated in the pooled assets accrues to the token suppliers, their liquidity pool (LP) tokens can be redeemed for an increasing quantity of the token deposited and bdAMM.
Interest rates for token suppliers are determined by the algorithmic interest rate pricing curve, alongside natural supply and demand forces of the pooled asset.
Last modified 7mo ago