Providing Liquidity
Last updated
Last updated
A Flash loan is an invaluable DeFi primitive that enables a powerful tool for protocols and users to amplify liquidity while giving lenders an opportunity to earn yield from loans with no risk of default! This is due to the defining property of how flash loans work: Any flash loan must be repaid in full within the same transaction that the loan is taken.
For all its strengths, one weakness of an is that relying solely on orders tends to provide very limited liquidity. By leveraging Flash Loans, Pondora is able to make both arbitrage and liquidity amplification accessible in a decentralized manner.
Simply go the Lending Page on the Pondora interface and select the Liquidity Tab:
In this section you will be able to enable which tokens to provide as liquidity and specify a fee you would like to ask for in exchange. When tokens from your Pond are used, you will earn this fee (paid in the same token) for each transaction. Fees may be specified using either Fixed values or a Percentage of the quantity used by the loan. It should be noted that since any liquidity used gets paid back immediately, these tokens effectively NEVER LEAVE your custody. And as with any Pondora feature, you are able to still make full use of these token balances for other features. In short, this allows for full liquid staking of any Cardano token!
