AMM LP Pools

AMM’s interested in leveraging their treasury or allowing trusted users or b2b partners to borrow against their AMM LP tokens can create custom pools allowing the use of the LP tokens as collateral.

Once AMM LP tokens are deposited into an Ionic pool, Ionic’s ERC-4626 plugins stake the LP tokens in their respective staking contract so participants can earn trading fees and farming yield while using their LP tokens as collateral.

Historically, if a user wanted to provide liquidity to an AMM, the user had no access to the liquidity in the LP token.

However, Ionic pools enable borrowing against these LP tokens so trusted participants can access the liquidity locked in their LP token and come up with a variety of strategies like leveraged yield farming, hedged positions, or delta-neutral.