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What is ALP?

ALP (Amped Liquidity Provider) token represents your share in the protocol’s liquidity pool. When you provide liquidity to Amped Finance, you receive ALP tokens in return. These tokens:
  • Track the value of your liquidity position
  • Earn protocol fees and rewards
  • Can be staked for additional rewards
  • Are specific to each network (e.g., Berachain ALP, Lightlink ALP)

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How the Liquidity Pool Works

The ALP pool is a single, aggregated liquidity pool that:
  • Acts as Counterparty: Serves as the counterparty to all trades on the platform
  • Multi-Asset Index: Contains a basket of whitelisted assets used for trading
  • Dynamic Rebalancing: Automatically adjusts composition based on market conditions
  • Oracle Pricing: Uses external price feeds to ensure accurate valuations
When traders profit, the pool pays out (decreasing ALP value). When traders lose, the pool gains (increasing ALP value). This design enables:
  • Zero price impact for large trades
  • Deep liquidity for all supported assets
  • Efficient capital utilization

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Benefits for Liquidity Providers

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1. Fee Revenue (70% of Protocol Fees)

  • Swap fees from spot trading
  • Open/close fees from leveraged positions
  • Liquidation fees from margin calls
  • Borrowing fees from leveraged trades

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2. Token Rewards

  • Earn escrowed AMPED (esAMP) tokens
  • Accumulate rewards that can be vested to AMPED
  • Participate in governance through earned tokens

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3. Advanced Features

  • yALP Vault Option: Auto-compound your rewards through the yALP vault
  • Multi-Chain Opportunities: Deploy liquidity across different networks
  • Risk Management: Pool automatically hedges based on trader positions

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Available Networks and Tokens

Different networks support different tokens for liquidity provision. Here’s what you can deposit on each network:
  • ETH
  • LL
  • WBTC
  • WBNB
  • USDT
  • USDC

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Sonic

  • WETH
  • S
  • ANON
  • USDC
  • EURC

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Berachain

  • USDC
  • BERA
  • HONEY
  • WETH

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Base

  • USDC
  • WETH
  • cbBTC
  • Virtual

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How to Provide Liquidity

  1. Connect Your Wallet
    • Visit the Amped Finance app
    • Connect your wallet to your chosen network
    • Select the Buy/LP menu item in the Earn section
  2. Choose Your Assets
    • Select the token you want to deposit
    • Enter the amount you wish to provide
    • Review the estimated ALP tokens you’ll receive
    • Note that the fees for depositing various tokens vary according to the target weight and amount of the token in the liquidity pool
  3. Approve and Deposit
    • Approve the token spend (first-time only)
    • Confirm the deposit transaction
    • Receive ALP tokens representing your position
  4. Automatic Staking
    • Your ALP tokens are automatically staked upon receipt
    • You receive two types of staked positions:
      • Fee ALP: Earns protocol trading fees and liquidation fees
      • Staked ALP: Earns additional protocol rewards
    • No additional action required - staking is handled automatically
  5. Monitor Your Position
    • Track your ALP balance
    • View your share of the liquidity pool
    • Monitor your earnings from:
      • Trading fees (via Fee ALP)
      • Protocol rewards (via Staked ALP)
      • Additional incentives when available

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Risk Management

The ALP pool employs sophisticated mechanisms to protect liquidity providers:

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Market Condition Adaptations

  • Bull Markets: Reduces stablecoin exposure, increases crypto asset allocation
  • Bear Markets: Increases stablecoin allocation for stability
  • High Volatility: Adjusts fees dynamically to manage risk

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Position Hedging

  • Pool composition automatically adjusts based on trader open interest
  • Higher weights in assets with net long positions
  • Increased stablecoin allocation when shorts dominate

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Important Considerations

  • The value of ALP tokens can fluctuate based on:
    • Protocol performance
    • Market conditions
    • Trading fees collected
    • Token price movements
    • Trader profit/loss outcomes
  • Liquidity provision involves risks, including potential impermanent loss
  • Different networks may have different minimum deposit requirements
  • Gas fees vary by network
  • Consider using the yALP vault for automated reward compounding
For details about rewards and earnings, please see the ALP Rewards section. For comprehensive technical details about the liquidity pool mechanics, refer to our Whitepaper.