Liquidity Strategies

Ether and Token Pools

Where wanting to catch short term price changes isn't a priority, and you are bullish on the two assets in the pool providing NFT liquidity paired with Ether or another token can be a good strategy.

If a pair has a steady need for swap volume and you expect the assets to appreciate in the long term providing liquidity will give you both exposure to the collection as a whole. With trade fees the risk IL will decrease and help to grow your position with less potential downside than just holding.

NFT Pure Pools

When providing liquidity to an AssetMerge liquidity pool, you are taking on potential risk from market exposure to both assets in the pool.

Utilizing existing NFT tokenisation protocols, such as NFTX. It would be possible to create a pool paired with an NFT collection, and a NFTX Vault token representing the same collection. This would end up offering liquidity in just the NFT collection, part of it being worth the floor price and the other part being individual items of higher market value.

Launching New Collections

As a NFT creator, creating a pool with some of the collection supply and some initial Ether can be a great way to release your tokens to the public.

A steady and liquid floor price will be available to all NFT holders, as they can always sell back to the pool. Which may interest more people to participate in holding due to the more liquid nature of your token compared to other tokens that do not have liquidity pools.

Earn yield from liquidity, providing liquidity is mutually beneficial to both a NFT project team and the holders. Comparing with having *royalty fees where a chunk of trade fees are sent directly to founders. Fees from a liquidity pool can provide yield to founders and increase the TVL of a pool at the same time, which benefits the overall prices and floor price of the pair.