# Pool (liquidity)

Take a look at the original Uniswap documentation for all  the details.

{% embed url="https://uniswap.org/docs/v2/core-concepts/pools/" %}

## Some handy facts

* Anybody can enlist anything, nobody is able to restrict this as this is a pure DEX based on ownerless smart contracts.
  * Also means we cannot be responsible for what people do there.
* Anybody can market make, thus provide liquidity for token-pairs. It is done by others, not by Carbonswap.
* Providing liquidity for a pair means you put in an equal worth portion from both tokens into the pool, based on the current market price.
  * if you don't like the market price, it's better to make swaps to correct it first, then putting your tokens into the pool.
  * It also means that you will hodl these 2 tokens while in the pool, so you must be comfortable hodling them. You are "longing" the 2 tokens.
* When you provide liquidity, you have a share in the pool based on how much you've put in. There is no limit on this. 0.25% of each swap from the pool is distributed amongst the liquidity providers according to their share.
  * You receive this automatically when you withdraw.
* Your share in the pool is represented by the CLP token (Carbonswap Liquidity Pool) you receive when you put in liquidity. When you take out your liquidity, you burn this CLP token.
* Each pool has its own CLP token, but they are called the same.
* When you take out your liquidity from the pool, it might not be the exact same ratio that you have put in.
  * E.g. you put in some X and Y tokens at the current market price. As the price changes, the ratios change, and you also collect fees, so there might be more of the X token in the end, or more from the Y.
  * The risk this carries is called [impermanent loss](https://finematics.com/impermanent-loss-explained/).
    * Despite the scary name it just means you _might_ miss out on some price action if one of the tokens in the pool changes a lot in value compared to the other. But this can be beneficial as well, so it's a hedged position.
    * You minimize this if you put liquidity in stable, popular pairs, or provide liquidity in pools that are eligible for SUSU farming.
